An Explanation of Anomalous Behavior in Binary-Choice Games: Entry, Voting, Public Goods, and the Volunteers' Dilemma
AbstractThis paper characterizes behavior with "noisy" decision making for a general class of N-person, binary-choice games. Applications include: participation games, voting, market entry, binary step-level public goods games, the volunteer's dilemma, the El Farol problem, etc. A simple graphical device is used to derive comparative statics and other theoretical properties of a "quantal response" equilibrium, and the resulting predictions are compared with Nash equilibria that arise in the limiting case of no noise. Many anomalous data patterns in laboratory experiments based on these games can be explained in this manner.
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Bibliographic InfoPaper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 328.
Length: 33 pages
Date of creation: Jan 2000
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Web page: http://www.virginia.edu/economics/home.html
participation games; entry; voting; step-level public goods games; volunteers' dilemma; quantal response equilibrium; El Farol problem; bounded rationality.;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
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