Coordination in Market Entry Games with Symmetric Players

Sundali, James A.; Rapoport, Anatol; Seale, Darryl A.

doi:10.1006/obhd.1995.1100

Cited by 102 publications

(65 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, in all four cases we find that there are significant differences between observed and efficient traffic flows (signrank test p-value < 0.01 in all cases). Similar to the prior literature on traffic (Morgan et al 2009, Anderson et al 2008) and market entry games (Sundali et al 1995, Rapoport et al 1998 we find that the average number of road users is much closer to the Nash equilibrium number than to the efficient number. Because individuals fail to internalize the social cost their decisions impose on others, their expected travel costs are higher than at the social optimum.…”

Section: Equilibrium Comparisonsupporting

confidence: 87%

“…The terminology is held constant across all sessions, so framing cannot affect the conclusions regarding comparative static hypotheses that are the focus of this research. 12 Most experiments on traffic (Helbing 2004, Ziegelmeyer et al 2008, Rapoport et al 2009) and market entry games (Sundali et al 1995), with the notable exception of Morgan et al (2009), provide subjects with the precise description of the associated costs. Duality of equilibrium prediction in our setup creates strategic uncertainty and Helbing (2004) conjecture that improved information could facilitate better "adaptation performance."…”

Section: Experimental Design and Proceduresmentioning

confidence: 99%

See 1 more Smart Citation

Traffic congestion: an experimental study of the Downs-Thomson paradox

2013

View full text Add to dashboard Cite

This study considers a model of road congestion with average cost pricing. Subjects must choose between two routes -Road and Metro. Travel cost on the road is increasing in the number of commuters who choose this route, while travel cost on the metro is decreasing in the number of its users. We examine how changes to road capacity, number of commuters, and metro pricing scheme influence the commuters' route-choice behavior. According to the Downs-Thomson paradox, improved road capacity increases travel times along both routes because it attracts more users to the road and away from the metro, thereby worsening both services. A change in route design generates two Nash equilibria; and the resulting coordination problem is amplified even further when the number of commuters is large. We find that, similar to other binary choice experiments with congestion effects, aggregate traffic flows are close to the equilibrium levels, but systematic individual differences persist over time.

show abstract

Section: Equilibrium Comparisonsupporting

confidence: 87%

Section: Experimental Design and Proceduresmentioning

confidence: 99%

Traffic congestion: an experimental study of the Downs-Thomson paradox

2013

View full text Add to dashboard Cite

show abstract

“…They use the Selten-style form of the strategy method, in which the interacting agents are first exposed to a repeated play of the game to provide them some experience, and then specify complete strategies of play. Rather than using a within-subject comparison (the paper asserts that within-subject tests can be problematic owing to a dissipation of spontaneity), the results in this paper are compared with the results in two papers that used direct response, Sundali et al (1995) and Rapoport et al (1998). Little difference in aggregate behavior is found across the elicitation methods, as the mean number of entries does not differ across methods for a large number of values for the capacity of the market.…”

Section: Literature Reviewmentioning

confidence: 98%

The strategy versus the direct-response method: a first survey of experimental comparisons

2011

View full text Add to dashboard Cite

In this paper, we present a first survey of the literature regarding whether the strategy method, in which a responder makes conditional decisions for each possible information set, leads to different experimental results than does the more standard direct-response method, in which the responder learns the action of the first mover and then chooses a response. Of the twenty-nine existing comparisons, sixteen find no difference, while four do find differences, and nine comparisons find mixed evidence. We also find some indications about the underlying determinants of when the two methods lead to different responses. For example, it appears that levels of punishment are substantially lower with the strategy method. In addition, it also appears that difference across these elicitation methods are more likely when people make fewer contingent choices. Finally, in no case do we find that a treatment effect found with the strategy method is not observed with the direct-response method.

show abstract

“…Meyer et al (1992) and Ochs (1990), on the other hand, pointed out the diculty of players to converge to pure strategy equilibria when more than one market is introduced. Several subsequent experiments (Rapoport, 1995;Sundali et al, 1995;Erev and Rapoport, 1998;Rapoport et al, 2000) have substantially conrmed that aggregate behavior in the game conforms surprisingly well to the Nash equilibrium solution, and this regularity has proven robust across a variety of dierent parameters, such as group size, entry costs, payo from staying out, number of markets among which to choose, and information conditions. Other experiments (Duy and Hopkins, 2005) show that additional information increases the speed of convergence to the game pure strategy equilibria.…”

Section: Literature Reviewmentioning

confidence: 86%

The Minority Game Unpacked: Coordination and Competition in a Team-Based Experiment

Devetag

Pancotto

Brenner³

2011

SSRN Journal

View full text Add to dashboard Cite

In minority games, players in a group must decide at each round which of two available options to choose, knowing that only subjects who picked the minority option obtain a positive reward. Previous experiments on the minority and similar congestion games have shown that players interacting repeatedly are remarkably able to coordinate eciently, despite not conforming to Nash equilibrium behavior. We conduct an experiment on a minority-of-three game in which each player is a team composed by three subjects. Each team can freely discuss its strategies in the game and decisions must be made via a majority rule. Team discussions are recorded and their content analyzed to detect evidence of strategy co-evolution among teams Philipps University Marburg, Germany 1 playing together. Our main results of team discussion analysis show no evidence supporting the mixed strategy Nash equilibrium solution, and support a low-rationality, backward-looking approach to model behavior in the game, more consistent with reinforcement learning models than with belief-based models. Showing level-2 rationality (i.e., reasoning about others' beliefs) is positively and signicantly correlated with higher than average earnings in the game, showing that a mildly sophisticated approach pays o. In addition, teams that are more successful tend to become more egocentric over time, paying more attention to their own past successes than to the behavior of other teams. Finally, we nd evidence of mutual adaptation over time, as teams that are more strategic (i.e., they pay more attention to other teams' moves)induce competing teams to be more egocentric instead. Our results contribute to the understanding of coordination dynamics resting on heterogeneity and co-evolution of decision rules rather than on conformity to equilibrium behavior. In addition, they provide support at the decision process level to the validity of modeling behavior using low-rationality reinforcement learning models.JEL codes: C72, C91, C92

show abstract

Coordination in Market Entry Games with Symmetric Players

Cited by 102 publications

References 0 publications

Traffic congestion: an experimental study of the Downs-Thomson paradox

Traffic congestion: an experimental study of the Downs-Thomson paradox

The strategy versus the direct-response method: a first survey of experimental comparisons

The Minority Game Unpacked: Coordination and Competition in a Team-Based Experiment

Contact Info

Product

Resources

About