Knowing me, knowing you: an experiment on mutual payoff information in the stag hunt and Prisoner’s Dilemma

Hazem Alshaikhmubarak (hamubarak@gmail.com), David Hales, Maria Kogelnik, Molly Schwarz and C. Kent Strauss
Additional contact information
Hazem Alshaikhmubarak: King Faisal University
David Hales: Global Innovations Bank
Maria Kogelnik: Yale University
Molly Schwarz: Federal Communications Commission
C. Kent Strauss: University of California Santa Barbara

Journal of the Economic Science Association, 2024, vol. 10, issue 2, No 14, 428-441

Abstract: Abstract We experimentally study how mutual payoff information affects strategic play. Subjects play the Prisoner’s Dilemma or Stag Hunt game against randomly re-matched opponents under two information treatments. In our partial-information treatment, subjects are shown only their own payoff structure, while in our full-information treatment they are shown both their own and their opponent’s payoff structure. In both treatments, they receive feedback on their opponent’s action after each round. We find that mutual payoff information initially facilitates reaching the socially optimal outcome in both games. Play in the Prisoner’s Dilemma converges toward the unique Nash equilibrium of the game under both information treatments, while in the Stag Hunt mutual payoff information has a substantial impact on play and equilibrium selection in all rounds of the game. Belief-learning model estimations and simulations suggest these effects are driven by both initial play and the way subjects learn.

Keywords: Payoff information; Stag hunt; Prisoner’s dilemma; Economics experiments (search for similar items in EconPapers)
JEL-codes: C71 C91 D81 D82 D83 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40881-024-00167-5

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