Optimization incentive and relative riskiness in experimental coordination games
AbstractWe compare the experimental results of three stag-hunt games. In contrast to Battalio et al. (2001), our design keeps the riskiness ratio of the payoff-dominant and the risk-dominant strategies at a constant level as the optimisation premium is increased. We define the riskiness ratio as the relative payoff range of the two strategies. We find that decreasing the riskiness ratio while keeping the optimization premium constant increases sharply the frequency of the risk-dominant strategy. On the other hand an increase of the optimization premium with a constant riskiness ratio has no effect on the choice frequencies. Finally, we confirm the dynamic properties found by Battalio et al. that increasing the optimization premium favours best-response and sensitivity to the history of play.
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Bibliographic InfoPaper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 02.
Length: 14 pages
Date of creation: 2009
Date of revision:
Coordination game; Game theory; Experimental economics.;
Other versions of this item:
- Dimitri Dubois & Marc Willinger & Phu Nguyen Van, 2008. "Optimization incentive and relative riskiness in experimental coordination games," Working Papers 08-19, LAMETA, Universtiy of Montpellier, revised Nov 2008.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-12-21 (All new papers)
- NEP-EXP-2008-12-21 (Experimental Economics)
- NEP-GTH-2008-12-21 (Game Theory)
- NEP-HPE-2008-12-21 (History & Philosophy of Economics)
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