Why do experimental subjects choose an equilibrium which is neither risk nor payoff dominant

Claudia Keser and Bodo Vogt

No 00-40, Papers from Sonderforschungsbreich 504

Abstract: In an experimental 2x2 coordination game with two strict equilibria we observe that, in contrast to equilibrium selection theory (Harsanyi and Selten 1988), only half of the subjects choose the strategy that relates to the payoff- and risk-dominant equilibrium. We propose modified risk dominance as an explanation for the observed deviations from payoff and risk dominance.

Keywords: equilibrium selection; modified risk dominance; prominence theory; experimental economics (search for similar items in EconPapers)
JEL-codes: C72 C90 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (9)

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