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Equilibrium Selection in Similar Repeated Games: Experimental Evidence on the Role of Precedents

John Duffy and Dietmar Fehr

No 141505, Working Papers from University of California-Irvine, Department of Economics

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 precedents may play for equilibrium selection between these two stage game forms. 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 of efficient play in the latter game. Similarly, a precedent of inefficient play in the Prisoner's Dilemma game does not extend to the repeated Stag Hunt game. We conclude that equilibrium selection between similar repeated games has little to do with historical precedents and is mainly determined by strategic considerations associated with the different payoffs of these similar repeated games.

Keywords: Sentiment; Equilibrium selection; Precedent; Beliefs; Stag hunt; Prisoner's dilemma; Repeated games; Experimental economics. (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D83 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-12
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth and nep-hpe
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https://www.economics.uci.edu/files/docs/workingpapers/2014-15/14-15-05.pdf (application/pdf)

Related works:
Journal Article: Equilibrium selection in similar repeated games: experimental evidence on the role of precedents (2018) Downloads
Working Paper: Equilibrium selection in similar repeated games: Experimental evidence on the role of precedents (2015) Downloads
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