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Man versus Nash An experiment on the self-enforcing nature of mixed strategy equilibrium

Author

Listed:
  • Jason Shachat

    (Wang Yanan Institute for Studies in Economics and MOE Key Laboratory in Econometrics, Xiamen University)

  • J. Todd Swarthout

    (Department of Economics, Georgia State University)

  • Lijia Wei

    (Wang Yanan Institute for Studies in Economics, Xiamen University)

Abstract

We examine experimentally how humans behave when they play against a computer which implements its part of a mixed strategy Nash equilibrium. We consider two games, one zero-sum and another unprofitable with a pure minimax strategy. A minority of subjects’ play was consistent with their Nash equilibrium strategy, while a larger percentage of subjects’ play was more consistent with different models of play: equiprobable play for the zero-sum game, and the minimax strategy in the unprofitable game. We estimate the heterogeneity and dynamics of the subjects’ latent mixed strategy sequences via a hidden Markov model. This provides clear results on the identification of the use of pure and mixed strategies and the limiting distribution over strategies. The mixed strategy Nash equilibrium is not self-enforcing except when it coincides with the equal probability mixed strategy, and there is surprising amounts of pure strategy play and clear cycling between the pure strategy states.

Suggested Citation

  • Jason Shachat & J. Todd Swarthout & Lijia Wei, 2011. "Man versus Nash An experiment on the self-enforcing nature of mixed strategy equilibrium," Working Papers 1101, Xiamen Unversity, The Wang Yanan Institute for Studies in Economics, Finance and Economics Experimental Laboratory, revised 21 Feb 2011.
  • Handle: RePEc:fee:wpaper:1101
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    References listed on IDEAS

    as
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    Cited by:

    1. Shachat, Jason & Swarthout, J. Todd, 2012. "Learning about learning in games through experimental control of strategic interdependence," Journal of Economic Dynamics and Control, Elsevier, vol. 36(3), pages 383-402.
    2. repec:wyi:journl:002151 is not listed on IDEAS
    3. Michael William Gmeiner, 2019. "History-Dependent Mixed Strategies: Evidence From Major League Baseball," Journal of Sports Economics, , vol. 20(3), pages 371-398, April.

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    More about this item

    Keywords

    Mixed Strategy; Nash Equilibrium; Experiment; Hidden Markov Model;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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