Who Acts More Like a Game Theorist? Group and Individual Play in a Sequential Market Game and the Effect of the Time Horizon

Wieland Mueller and Fangfang Tan
Authors registered in the RePEc Author Service: Wieland Müller

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: Previous experimental results on one-shot sequential two-player games show that group decisions are closer to the subgame-perfect Nash equilbirum than individual decisions. We extend the analysis of inter-group versus inter-individual decision making to a Stackelberg market game, by running both one-shot and repeated markets. Whereas in the one-shot markets we find no significant differences in the behavior of groups and individuals, we find that the behavior of groups is further away from the subgame-perfect equilibrium of the stage game than that of individuals. To a large extent, this result is independent of the method of eliciting choices (sequential or strategy method) and the method used to account for observed first- and second-mover behavior. We provide evidence on followers' response functions and electronic chats to offer an explanation for the differential effect that the time horizon of interaction has on the extent of individual and group players (non)conformity with subgame perfectness.

Keywords: Stackelberg market; groups versus individuals; discontinuity effect; experiment (search for similar items in EconPapers)
JEL-codes: C72 C92 L13 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-10
New Economics Papers: this item is included in nep-evo, nep-exp, nep-gth and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Who acts more like a game theorist? Group and individual play in a sequential market game and the effect of the time horizon (2013)
Working Paper: Who acts more like a game theorist? Group and individual play in a sequential market game and the effect of the time horizon (2011)
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