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Optimization incentive and relative riskiness in experimental coordination games

Dimitri Dubois (), Marc Willinger () and Phu Nguyen Van
Authors registered in the RePEc Author Service: Phu Nguyen-Van ()

Working Papers from LAMETA, Universtiy of Montpellier

Abstract: We compare the experimental results of three stag-hunt games. In contrast to Battalio et al. (2001), our design keeps the riskiness ratio of the payoff-dominant and the risk-dominant strategies at a constant level as the optimisation premium is increased. We define the riskiness ratio as the relative payoff range of the two strategies. We find that decreasing the riskiness ratio while keeping the optimization premium constant increases sharply the frequency of the risk-dominant strategy. On the other hand an increase of the optimization premium with a constant riskiness ratio has no effect on the choice frequencies. Finally, we confirm the dynamic properties found by Battalio et al. that increasing the optimization premium favours best-response and sensitivity to the history of play.

New Economics Papers: this item is included in nep-exp and nep-gth
Date: 2008-11, Revised 2008-11
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http://www.lameta.univ-montp1.fr/Documents/DR2008-19.pdf First version, 2008 (application/pdf)

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Working Paper: Optimization incentive and relative riskiness in experimental coordination games (2009) Downloads
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