When less information is good enough: experiments with global stag hunt games

John van Huyck, Ajalavat Viriyavipart () and Alexander Brown

Experimental Economics, 2018, vol. 21, issue 3, No 4, 527-548

Abstract: Abstract There is mixed evidence on whether subjects coordinate on the efficient equilibrium in experimental stag hunt games under complete information. A design that generates an anomalously high level of coordination, Rankin et al. (Games Econo Behav 32(2):315–337, 2000), varies payoffs each period in repeated play rather than holding them constant. These payoff “perturbations” are eerily similar to those used to motivate the theory of global games, except the theory operates under incomplete information. Interestingly, that equilibrium selection concept is known to coincide with risk dominance, rather than payoff dominance. Thus, in theory, a small change in experimental design should produce a different equilibrium outcome. We examine this prediction in two treatments. In one, we use public signals to match Rankin et al. (2000)’s design; in the other, we use private signals to match the canonical example of global games theory. We find little difference between treatments, in both cases, subject play approaches payoff dominance. Our literature review reveals this result may have more to do with the idiosyncrasies of our complete information framework than the superiority of payoff dominance as an equilibrium selection principle.

Keywords: Stag hunt; Global games; Efficiency; Equilibrium selection; Threshold strategies; Risk dominance; Payoff dominance; Experiments (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D82 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10683-018-9577-0

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