Correlated Equilibria, Good And Bad: An Experimental Study
AbstractWe report results from an experiment that explores the empirical validity of "correlated equilibrium", an important generalization of Nash equilibrium. Specifically, we examine the conditions under which subjects playing the game of Chicken will condition their behavior on private third-party recommendations drawn from publicly announced distributions. We find that when recommendations are given, behavior differs from both a mixed-strategy Nash equilibrium and behavior without recommendations. In particular, subjects typically follow recommendations if and only if (1) those recommendations derive from a correlated equilibrium and (2) that correlated equilibrium is payoff-enhancing relative to the available Nash equilibria. Copyright (2010) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 51 (2010)
Issue (Month): 3 (08)
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Other versions of this item:
- John Duffy & Nick Feltovich, 2008. "Correlated Equilibria, Good and Bad: An Experimental Study," Working Papers 358, University of Pittsburgh, Department of Economics, revised Oct 2008.
- Duffy, John & Feltovich, Nick, 2010. "Correlated equilibria, good and bad: an experimental study," SIRE Discussion Papers 2010-123, Scottish Institute for Research in Economics (SIRE).
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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