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The Effects of Payoff Magnitude and Heterogeneity on Behavior in 2 x 2 Games with Unique Mixed Strategy Equilibria

McKelvey, Richard D. and Palfrey, Thomas R. and Weber, Roberto A. (1999) The Effects of Payoff Magnitude and Heterogeneity on Behavior in 2 x 2 Games with Unique Mixed Strategy Equilibria. Social Science Working Paper, 991. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20170815-143845609

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Abstract

The Logit version of Quantal Response Equilibrium predicts that equilibrium behavior in games will vary systematically with payoff magnitudes, if all other factors are held constant (including the Nash equilibria of the game). We explore this in the context of a set of asymmetric 2x2 games with unique totally mixed strategy equilibria. The data provide little support for the payoff magnitude predictions of the Logit Equilibrium model. We extend the theoretical Quantal Response Equilibrium model to allow for heterogeneity, and find that the data fit the heterogeneous version of the theory significantly better.


Item Type:Report or Paper (Working Paper)
Related URLs:
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http://resolver.caltech.edu/CaltechAUTHORS:20160307-165356354Related ItemPublished Version
ORCID:
AuthorORCID
Palfrey, Thomas R.0000-0003-0769-8109
Alternate Title:The Effects of Payoff Magnitude and Heterogeneity on Behavior in 2x2 Games with Unique Mixed Strategy Equilibria
Additional Information:Published as McKelvey, Richard D. and Weber, Roberto A. and Palfrey, Thomas R. (2000) The Effects of Payoff Magnitude and Heterogeneity on Behavior in 2x2 Games with Unique Mixed Strategy Equilibria. Journal of Economic Behavior and Organization, 42 (4). pp. 523-548.
Group:Social Science Working Papers
Subject Keywords:Experiments, Game theory, Equilibrium, Mixed strategies
Series Name:Social Science Working Paper
Issue or Number:991
Classification Code:JEL: C72 ,C91 ,C92
Record Number:CaltechAUTHORS:20170815-143845609
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170815-143845609
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80428
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:15 Aug 2017 22:08
Last Modified:22 Nov 2019 09:58

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