When are Nash equilibria self-enforcing? An experimental analysis
AbstractWe investigate the effect of non-binding pre-play communication in experiments with simple two-player coordination games. We reproduce the results of other studies in which play converges to a Pareto-dominated equilibrium in the absence of communication, and communication moves outcomes in the direction of the Pareto-dominant equilibrium. However, we provide new results which show that the effectiveness of communication is sensitive to the structure of payoffs. Our results support an argument put forward by Aumann: agreements to play a Nash equilibrium are fragile when players have a strict preference over their opponent's strategy choice. We also find that informative communication does not necessarily lead to the Pareto-dominant equilibrium.
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Bibliographic InfoArticle provided by Springer in its journal International Journal of Game Theory.
Volume (Year): 29 (2001)
Issue (Month): 4 ()
Note: Received: January 1997/Revised version: February 1997
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Web page: http://link.springer.de/link/service/journals/00182/index.htm
Other versions of this item:
- Kenneth Clark & Stephen Kay & Martin Sefton, 1997. "When Are Nash Equilibria Self-Enforcing? An Experimental Analysis," Experimental 9707001, EconWPA.
- Clark, K. & Kay, S. & Sefton, M, 1997. "When Are Nash Equilibria Self Enforcing ? An Experimental Analysis," Working Papers 97-04, University of Iowa, Department of Economics.
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
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