Why do experimental subjects choose an equilibrium which is neither risk nor payoff dominant

Claudia Keser () and Bodo Vogt ()
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Claudia Keser: Institut für Statistik und Mathematische Wirtschaftstheorie, Postal: Universität Karlsruhe, Rechenzentrum, Zirkel 2, 76128 Karlsruhe
Bodo Vogt: Universität Magdeburg, Postal: Universitätsplatz 2 D-39106 Magdeburg

No 00-40, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: In an experimental 2x2 coordination game with two strict equilibria we observe that, in contrast to equilibrium selection theory (Harsanyi and Selten 1988), only half of the subjects choose the strategy that relates to the payoff- and risk-dominant equilibrium. We propose modified risk dominance as an explanation for the observed deviations from payoff and risk dominance.

Pages: 11 pages
New Economics Papers: this item is included in nep-exp
Note: We thank Roy Gardner and Werner Güth for their helpful comments. Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. Thanks are also due to the research group
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Citations: View citations in EconPapers (9)

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