Impulse Response Dynamics in Weakest Link Games
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Sebastian J. Goerg
Abstract
In a recent paper, Croson et al. (2015) experimentally study three weakest link games with multiple symmetric equilibria. They demonstrate that static concepts based on the Nash equilibrium (including multiple Nash equilibria, quantal response equilibria, and equilibrium selection by risk and payoff dominance) cannot successfully capture the observed treatment differences. Using Reinhard Selten’s impulse response dynamics, we derive a proposition that provides a theoretical ranking of contribution levels in the weakest link games. We show that the predicted ranking of treatment outcomes is fully consistent with the observed data. In addition, we demonstrate that the impulse response dynamics perform well in tracking average contributions over time. We conclude that Reinhard Selten’s impulse response dynamics provide an extremely valuable behavioral approach that is not only capable of resolving the indecisiveness of static approaches in games with many equilibria, but that can also be used to track the development of choices over time in games with repeated interaction.
© 2019 by Walter de Gruyter Berlin/Boston
Articles in the same Issue
- Foreword: Special Issue in Honor of Reinhard Selten’s 85th Birthday
- Impulse Response Dynamics in Weakest Link Games
- Refining Raiffa – Aspiration Adaptation within the Zone of Possible Ag
- Designing Institutions for Social Dilemmas
- On the Value of Transparency and Information Acquisition in Bargaining*
- Public Statistics and Private Experience: Varying Feedback Information in a Take-or-Pass Game
- An Experiment on Forward vs. Backward Induction: How Fairness and Level k Reasoning Matter
- Social Interaction Promotes Risk Taking in a Stag Hunt Game
Articles in the same Issue
- Foreword: Special Issue in Honor of Reinhard Selten’s 85th Birthday
- Impulse Response Dynamics in Weakest Link Games
- Refining Raiffa – Aspiration Adaptation within the Zone of Possible Ag
- Designing Institutions for Social Dilemmas
- On the Value of Transparency and Information Acquisition in Bargaining*
- Public Statistics and Private Experience: Varying Feedback Information in a Take-or-Pass Game
- An Experiment on Forward vs. Backward Induction: How Fairness and Level k Reasoning Matter
- Social Interaction Promotes Risk Taking in a Stag Hunt Game
