On the empirical relevance of correlated equilibrium

Daniel Friedman, Jean Paul Rabanal (), Olga A. Rud and Shuchen Zhao

Journal of Economic Theory, 2022, vol. 205, issue C

Abstract: Absent coordinating signals from an exogenous benevolent agent, can an efficient correlated equilibrium emerge? Theoretical work in adaptive dynamics suggests a positive answer, which we test in a laboratory experiment. In the well-known Chicken game, we observe time average play that is close to the asymmetric pure Nash equilibrium in some treatments, and in other treatments we observe collusive play. In a game resembling rock-paper-scissors or matching pennies, we observe time average play close to a correlated equilibrium that is more efficient than the unique Nash equilibrium. Estimates and simulations of adaptive dynamics capture much of the observed heterogeneity across player pairs as well as dynamic regularities.

Keywords: Correlated equilibrium; Laboratory experiment; Adaptive dynamics (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053122001211
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On the empirical relevance of correlated equilibrium (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:205:y:2022:i:c:s0022053122001211

DOI: 10.1016/j.jet.2022.105531

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().