Experimental Investigation of a Cyclic Duopoly Game
AbstractThe notion of a cyclic game has been introduced by Selten and Wooders (2001). They illustrate the concept by the analysis of a cyclic duopoly game. The experiments reported concern this game. The game was played by eleven matching groups of six players each. The observed choice fre- quencies were compared with the predictions of Nash equilibrium, impulse balance equilibrium (Selten, Abbink and Cox (2005), Selten and Chmura (2007)) and two-sample equilbrium (Osborne and Rubinstein(1998)). Pair- wise comparisons by the Wilcoxon Signed-rank test show that impulse balance equilibrium as well as two-sample equilibrium have a significantly better predictive success than Nash equilibrium. The difference between impulse balance equilibrium and two-sample equilibrium is not significant.In each matching group three players acted only in uneven periods and the other three only in even periods. This game has two pure strategy equi- libria in which both types of players behave differently. The data exhibit a weak but significant tendency in the direction of coordination at a pure strategy equilibrium.
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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse9_2007.
Date of creation: Jun 2007
Date of revision:
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cyclic game duopoly experiment; impulse balance equilibrium; two-sample equilibrium;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-30 (All new papers)
- NEP-EXP-2007-06-30 (Experimental Economics)
- NEP-GTH-2007-06-30 (Game Theory)
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