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A unified approach to comparative statics puzzles in experiments

  • Schmutzler, Armin

The paper shows that several game-theoretic solution concepts provide similar comparative statics predictions over a wide class of games. I start from the observation that, in many experiments, behavior is affected by parameter shifts that leave the Nash equilibrium unchanged. I explain the direction of change with a heuristic structural approach, using properties such as strategic complementarities and increasing differences. I show that the approach is consistent with general comparative statics results for (i) the Nash equilibrium of a game with perturbed payoff functions, (ii) the quantal response equilibrium, (iii) level-k reasoning. I also relate the structural approach to equilibrium selection concepts.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 1 (January)
Pages: 212-223

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:1:p:212-223
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