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Conventions and Local Interaction Structures: Experimental Evidence

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  • Siegfried K. Berninghaus
  • Karl-Martin Ehrhart
  • Claudia Keser

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    Abstract

    We present a set of experimental coordination games with a payoff-dominant and a risk-dominant Nash equilibrium. We examine how much local interaction structures affect players' strategy choices. Our three major observations are the following: First, local interaction with open neighborhoods along a circle leads to less coordination on the payoff-dominant equilibrium than interaction in closed neighborhoods (see also Keser, Ehrhart, and Berninghaus, Economics Letters, 1998). Second, when players are allocated around a circle, the neighborhood size has, in the long run, no effect on the players' strategy choices. Third, with the same neighborhood size, players allocated on a lattice tend less than players allocated around a circle to coordinate on the payoff-dominant equilibrium. This is true although the players are given exactly the same instructions. Nous présentons une série de jeux de coordination expérimentaux avec un équilibre de Nash qui est dominant par rapport au risque et un autre équilibre qui est dominant par rapport au gain. Nous examinons à quel degré des structures d'interaction locale ont une influence sur les choix de stratégies. Nos observations majeures sont les suivantes: Premièrement, l'interaction locale avec des voisinages autour d'un cercle implique moins de coordination sur l'équilibre qui est dominant par rapport au gain que l'interaction dans des voisinages fermés (voir aussi Keser, Ehrhart et Berninghaus, Economics Letters, 1998). Deuxièmement, quand les joueurs sont disposés en cercle, la taille du voisinage n'a pas d'effet à long terme sur les choix de stratégie par les joueurs. Troisièmement, avec la même taille de voisinage, des joueurs disposés en tore tendent moins que des joueurs disposés en cercle de se coordonner sur l'équilibre qui est dominant par rapport au gain. Cette différence est présente bien que les joueurs reçoivent exactement les mêmes instructions.

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    Bibliographic Info

    Paper provided by CIRANO in its series CIRANO Working Papers with number 2000s-36.

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    Date of creation: 01 Sep 2000
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    Handle: RePEc:cir:cirwor:2000s-36

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    Related research

    Keywords: Equilibrium selection; local interaction structures; experimental economics; Sélection des équilibres; structure d'interaction locale; économie expérimentale;

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    1. Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-72, March.
    2. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, November.
    3. Cooper, Russell, et al, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 739-71, May.
    4. Aderlini, L. & Ianni, A., 1993. "Path Dependence and Learning from Neighbours," Papers 186, Cambridge - Risk, Information & Quantity Signals.
    5. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-71, September.
    6. V. Crawford, 2010. "Adaptive Dynamics in Coordination Games," Levine's Working Paper Archive 404, David K. Levine.
    7. Keser, Claudia & Ehrhart, Karl-Martin & Berninghaus, Siegfried K., 1998. "Coordination and local interaction: experimental evidence," Economics Letters, Elsevier, vol. 58(3), pages 269-275, March.
    8. Tone Dieckmann, 1997. "The Evolution of conventions with Mobile Players," Economics, Finance and Accounting Department Working Paper Series n720897, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    9. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
    10. Boyer, Robert & Orlean, Andre, 1992. "How Do Conventions Evolve?," Journal of Evolutionary Economics, Springer, vol. 2(3), pages 165-77, October.
    11. Berninghaus, Siegfried K. & Ehrhart, Karl-Martin, 1998. "Time horizon and equilibrium selection in tacit coordination games: Experimental results," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 231-248, October.
    12. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
    13. Stahl, Dale O., 1996. "Boundedly Rational Rule Learning in a Guessing Game," Games and Economic Behavior, Elsevier, vol. 16(2), pages 303-330, October.
    14. Cheung, Yin-Wong & Friedman, Daniel, 1997. "Individual Learning in Normal Form Games: Some Laboratory Results," Games and Economic Behavior, Elsevier, vol. 19(1), pages 46-76, April.
    15. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    16. Cooper, Russell & De Jong, Douglas V. & Forsythe, Robert & Ross, Thomas W., 1992. "Forward induction in coordination games," Economics Letters, Elsevier, vol. 40(2), pages 167-172, October.
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