Does informational equivalence preserve strategic behavior? Experimental results on Trockel's model of Selten's chain store story

DOI10.3390/G11010009MaRDI QIDQ2221245zbMATH OpenOpenAlexFDO

Authors Papatya Duman

Publication date 26 January 2021

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g11010009

zbMATH Keywords

chain store gameentry deterrencereputation buildingTrockel's game

Mathematics Subject Classification ID

Games in extensive form (91A18) Experimental studies (91A90)

Review text

Summary: The purpose of this study is to experimentally test Trockel's game, which is a modelling of the classical chain store game (CSG), and determine whether one of the two theories of \textit{equality} and \textit{deterrence} may better account for the observed behavior. The CSG is an example of a simple game in extensive form where the actual behavior of well-informed players cannot be expected to agree with the clear results of game theoretical reasoning. To explain the disagreement between the theory and the expected behavior, Trockel's game is proposed as an alternative modelling of the scenario. The existence of more than one equilibrium in Trockel's game opens a door for reputation building. This study is the first attempt to experimentally test this alternative game with the same purpose. According to my data, there is some evidence in favor of both equality and deterrence hypotheses. However, since the strategies compatible with the equality hypothesis are played more frequently, I observe some patterns which share the same intuition with the deterrence hypothesis.

Recommendations

• Evidence on the equivalence of the strategic and extensive form representation of games.
• Equilibrium and reinforcement learning in private-information games: An experimental study
• Equilibrium selection in static and dynamic entry games
• The chain store paradox
• Non-equilibrium play in centipede games

Cites work

• scientific article; zbMATH DE number 3943488 (Why is no real title available?)
• scientific article; zbMATH DE number 3078992 (Why is no real title available?)
• Note on von Neumann-Morgenstern's Strong Independence Axiom
• Order of play in strategically equivalent games in extensive form
• Predation, reputation, and entry deterrence
• Prospect Theory: An Analysis of Decision under Risk
• Reputation and imperfect information
• The chain store paradox
• The chain-store paradox revisited
• The framing of decisions and the psychology of choice

Cited in

(1)

• Do people make strategic commitments? Experimental evidence on strategic information avoidance

Describes a project that uses

Uses Software

• Z-Tree
• ORSEE

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