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Eliciting strategies in indefinitely repeated games of strategic substitutes and complements

Author

Listed:
  • Matthew Embrey

    (Department of Economics, University of Sussex)

  • Friederike Mengel

    (Department of Economics, University of Essex)

  • Ronald Peeters

    (Department of Economics, Maastricht University)

Abstract

We introduce a novel method to elicit strategies in indefinitely repeated games and apply it to games of strategic substitutes and complements. We find that out of 256 possible unit recall machines (and 1024 full strategies) participants could use, only five machines are used more than 5 percent of the time. Those are “static Nash”, “myopic best response”, “Tit-for-Tat” and two “Nash reversion” strategies. We compare outcome data with “hot” treatments and find that the fact that we elicit strategies did not affect the path of play. We also discuss applications to IO literature and compare insights to previous literature on strategy elicitation mostly focused on the prisoner's dilemma.

Suggested Citation

  • Matthew Embrey & Friederike Mengel & Ronald Peeters, 2017. "Eliciting strategies in indefinitely repeated games of strategic substitutes and complements," Working Paper Series 0317, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susewp:0317
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    Citations

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    Cited by:

    1. Bigoni, Maria & Casari, Marco & Salvanti, Andrea & Skrzypacz, Andrzej & Spagnolo, Giancarlo, 2022. "It’s Payback Time: New Insights on Cooperation in the Repeated Prisoners’ Dilemma," IZA Discussion Papers 15023, Institute of Labor Economics (IZA).
    2. Cason, Timothy N. & Mui, Vai-Lam, 2019. "Individual versus group choices of repeated game strategies: A strategy method approach," Games and Economic Behavior, Elsevier, vol. 114(C), pages 128-145.
    3. Mermer, Ayşe Gül & Müller, Wieland & Suetens, Sigrid, 2021. "Cooperation in infinitely repeated games of strategic complements and substitutes," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1191-1205.
    4. Dongkyu Chang & Duk Gyoo Kim & Wooyoung Lim, 2022. "Positive and Negative Selection in Bargaining: An Experiment," CESifo Working Paper Series 9908, CESifo.

    More about this item

    Keywords

    indefinitely repeated games; strategy elicitation; experiments;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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