Equilibrium Selection in Experimental Games on Networks

Gary Charness, Francesco Feri, Miguel Meléndez-Jiménez () and Matthias Sutter ()

University of California at Santa Barbara, Economics Working Paper Series from Department of Economics, UC Santa Barbara

Abstract: We study behavior and equilibrium selection in experimental network games. We varytwo important factors: (a) actions are either strategic substitutes or strategic complements, and(b) subjects have either complete or incomplete information about the structure of a randomnetwork. Play conforms strongly to the theoretical predictions, providing an impressivebehavioral confirmation of the Galeotti, Goyal, Jackson, Vega-Redondo, and Yariv (2010)model. The degree of equilibrium play is striking, even with incomplete information. We findthat under complete information, subjects typically play the stochastically-stable (inefficient)equilibrium when the game involves strategic substitutes, but play the efficient one with strategiccomplements. Our results suggest that equilibrium multiplicity may not be a major concern.Subjects’ actions and realized outcomes under incomplete information depend strongly on boththe degree and the connectivity. When there are multiple equilibria, subjects begin by playing theefficient equilibrium, but eventually converge to the inefficient one.

Keywords: Social and Behavioral Sciences; random networks; incomplete information; strategic substitutes; strategic complements; experiment (search for similar items in EconPapers)
Date: 2012-02-18
New Economics Papers: this item is included in nep-cta, nep-exp, nep-gth, nep-hpe and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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