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A unified approach to comparative statics puzzles in experiments

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  • Armin Schmutzler

    ()
    (Socioeconomic Institute, University of Zurich)

Abstract

Many experimental studies implement two versions of one game for which agents’ behavior is fundamentally different even though the Nash prediction is the same. This paper provides a novel explanation of such findings. Starting from the observation that many of the games under consideration satisfy the strategic-complementarity property, I obtain predictions for the direction of adjustment in response to parameter changes which do not require calculation of the equilibrium. I show that these predictions explain the experimental evidence very well. Further, I provide a behavioral justification of the approach, and I explore the relation to alternative explanations based on equilibrium selection theories and the quantal response equilibrium.

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File URL: http://www.soi.uzh.ch/research/wp/2006/wp0601.pdf
File Function: revised version, 2008
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Bibliographic Info

Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0601.

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Length: 31 pages
Date of creation: Feb 2006
Date of revision: Nov 2008
Publication status: forthcoming in Games and Economic Behaviour
Handle: RePEc:soz:wpaper:0601

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Keywords: experimental economics; game theory; Nash equilibrium; embedding method;

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References

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Citations

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Cited by:
  1. Wichardt, Philipp C., 2014. "Models and Fictions in (Micro-)Economics," Working Papers, Lund University, Department of Economics 2014:31, Lund University, Department of Economics.
  2. Jürgen Eichberger & David Kelsey, 2008. "Are the Treasures of Game Theory Ambiguous?," Working Papers 0469, University of Heidelberg, Department of Economics, revised Jul 2008.
  3. Miettinen, Topi, 2013. "Promises and conventions – An approach to pre-play agreements," Games and Economic Behavior, Elsevier, Elsevier, vol. 80(C), pages 68-84.

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