Equilibrium selection in similar repeated games: experimental evidence on the role of precedents

John Duffy and Dietmar Fehr

Experimental Economics, 2018, vol. 21, issue 3, No 6, 573-600

Abstract: Abstract We report on an experiment examining behavior and equilibrium selection in two similar, infinitely repeated games, Stag Hunt and Prisoner’s Dilemma under anonymous random matching. We are interested in the role that historical precedents may play for equilibrium selection between these two repeated games. We find that a precedent for efficient play in the repeated Stag Hunt game does not carry over to the repeated Prisoner’s Dilemma game despite the possibility that efficient play can be sustained as an equilibrium of the indefinitely repeated game. Similarly, a precedent for inefficient play in the repeated Prisoner’s Dilemma game does not extend to the repeated Stag Hunt game. We conclude that equilibrium selection between similar repeated games may have less to do with historical precedents and might instead depend more on strategic considerations associated with the different payoffs of these similar repeated games.

Keywords: Repeated games; Coordination problems; Equilibrium selection; Similarity; Precedent; Beliefs; Experimental economics (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D83 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (15)

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Working Paper: Equilibrium selection in similar repeated games: Experimental evidence on the role of precedents (2015)
Working Paper: Equilibrium Selection in Similar Repeated Games: Experimental Evidence on the Role of Precedents (2014)
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DOI: 10.1007/s10683-017-9531-6

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