Equilibrium Selection under Limited Control - An Experimental Study of the Network Hawk-Dove Game

Siegfried Berninghaus (), Stephan Schosser () and Bodo Vogt ()
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Siegfried Berninghaus: Karlsruhe Institute of Technology, Institute of Economics
Stephan Schosser: University of Magdeburg, Department of Economics
Bodo Vogt: University of Magdeburg, Department of Economics

No 2013-048, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: For games of simultaneous action selection and network formation, game-theoretic behavior and experimental observations are not in line: While theory typically predicts inefficient outcomes for (anti-)coordination games, experiments show that subjects tend to play efficient (non Nash) strategy profiles. A reason for this discrepancy is the tendency to model corresponding games as one-shot and derive predictions. In this paper, we calculate the equilibria for a finitely repeated version of the Hawk-Dove game with endogenous network formation and show that the repetition leads to additional equilibria, namely the efficient ones played by human subjects. We confirm our results by an experimental study. In addition, we show both theoretically and experimentally that the equilibria reached crucially depend on the order in which subjects adjust their strategy. Subjects only reach efficient outcomes if they first adapt their action and then their network. If they choose their network first, they do not reach efficient outcomes.

Keywords: Network games; Hawk/Dove games; finitely repeated game (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D85 (search for similar items in EconPapers)
Date: 2013-11-13
New Economics Papers: this item is included in nep-cdm, nep-evo, nep-exp, nep-gth, nep-hpe and nep-net
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