An experimental study of coordination and learning in iterated two-market entry games

Eyal Winter (), Amnon Rapoport and Darryl A. Seale
Additional contact information
Darryl A. Seale: University of Nevada, Las Vegas, AZ 89154, USA

Economic Theory, 2000, vol. 16, issue 3, 687 pages

Abstract: Tacit coordination in large groups is studied in an iterated market entry game with complete information and multiple market capacities that are varied randomly from period to period. On each period, each player must decide independently whether to enter any of the markets, and if entering, which of the two markets to enter. Across symmetric and asymmetric markets, we find remarkable coordination on the aggregate level, which is accounted for by the Nash equilibrium, together with considerable individual differences in frequency of entry and decision rules. With experience, the decisions of most players converge to decision rules with cutoff values on the combined market capacity that determine whether or not to enter but not which of the two markets to enter. This latter decision is determined probabilistically by the differential market capacities. The aggregate and individual results are accounted for quite well by a reinforcement-based learning model that combines deterministic and probabilistic elements.

Keywords: Market entry games; Coordination success; Large groups; Adaptive learning; Nash equilibrium solution. (search for similar items in EconPapers)
JEL-codes: C72 C92 D83 (search for similar items in EconPapers)
Date: 2000-08-11
Note: Received: January 29, 1999; revised version: October 25, 1999
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://link.springer.de/link/service/journals/00199/papers/0016003/00160661.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:16:y:2000:i:3:p:661-687

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().