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Nash versus coarse correlation

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Nash versus coarse correlation. / Georgalos, Konstantinos; Ray, Indrajit; Sen Gupta, Sonali.
In: Experimental Economics, Vol. 23, 01.12.2020, p. 1178–1204.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Georgalos, K, Ray, I & Sen Gupta, S 2020, 'Nash versus coarse correlation', Experimental Economics, vol. 23, pp. 1178–1204. https://doi.org/10.1007/s10683-020-09647-x

APA

Georgalos, K., Ray, I., & Sen Gupta, S. (2020). Nash versus coarse correlation. Experimental Economics, 23, 1178–1204. https://doi.org/10.1007/s10683-020-09647-x

Vancouver

Georgalos K, Ray I, Sen Gupta S. Nash versus coarse correlation. Experimental Economics. 2020 Dec 1;23:1178–1204. Epub 2020 Feb 20. doi: 10.1007/s10683-020-09647-x

Author

Georgalos, Konstantinos ; Ray, Indrajit ; Sen Gupta, Sonali. / Nash versus coarse correlation. In: Experimental Economics. 2020 ; Vol. 23. pp. 1178–1204.

Bibtex

@article{cf9b1e39b0f3461ca24414d1710c9fcc,
title = "Nash versus coarse correlation",
abstract = "We run a laboratory experiment to test the concept of coarse correlated equilibrium (Moulin and Vial in Int J Game Theory 7:201-221, 1978), with a two-person game with unique pure Nash equilibrium which is also the solution of iterative elimination of strictly dominated strategies. The subjects are asked to commit to a device that randomly picks one of three symmetric outcomes (including the Nash point) with higher ex-ante expected payoff than the Nash equilibrium payoff. We find that the subjects do not accept this lottery (which is a coarse correlated equilibrium); instead, they choose to play the game and coordinate on the Nash equilibrium. However, given an individual choice between a lottery with equal probabilities of the same outcomes and the sure payoff as in the Nash point, the lottery is chosen by the subjects. This result is robust against a few variations. We explain our result as selecting risk-dominance over payoff dominance in equilibrium.",
author = "Konstantinos Georgalos and Indrajit Ray and {Sen Gupta}, Sonali",
note = "The final publication is available at Springer via https://doi.org/10.1007/s10683-020-09647-x",
year = "2020",
month = dec,
day = "1",
doi = "10.1007/s10683-020-09647-x",
language = "English",
volume = "23",
pages = "1178–1204",
journal = "Experimental Economics",
issn = "1386-4157",
publisher = "Springer New York",

}

RIS

TY - JOUR

T1 - Nash versus coarse correlation

AU - Georgalos, Konstantinos

AU - Ray, Indrajit

AU - Sen Gupta, Sonali

N1 - The final publication is available at Springer via https://doi.org/10.1007/s10683-020-09647-x

PY - 2020/12/1

Y1 - 2020/12/1

N2 - We run a laboratory experiment to test the concept of coarse correlated equilibrium (Moulin and Vial in Int J Game Theory 7:201-221, 1978), with a two-person game with unique pure Nash equilibrium which is also the solution of iterative elimination of strictly dominated strategies. The subjects are asked to commit to a device that randomly picks one of three symmetric outcomes (including the Nash point) with higher ex-ante expected payoff than the Nash equilibrium payoff. We find that the subjects do not accept this lottery (which is a coarse correlated equilibrium); instead, they choose to play the game and coordinate on the Nash equilibrium. However, given an individual choice between a lottery with equal probabilities of the same outcomes and the sure payoff as in the Nash point, the lottery is chosen by the subjects. This result is robust against a few variations. We explain our result as selecting risk-dominance over payoff dominance in equilibrium.

AB - We run a laboratory experiment to test the concept of coarse correlated equilibrium (Moulin and Vial in Int J Game Theory 7:201-221, 1978), with a two-person game with unique pure Nash equilibrium which is also the solution of iterative elimination of strictly dominated strategies. The subjects are asked to commit to a device that randomly picks one of three symmetric outcomes (including the Nash point) with higher ex-ante expected payoff than the Nash equilibrium payoff. We find that the subjects do not accept this lottery (which is a coarse correlated equilibrium); instead, they choose to play the game and coordinate on the Nash equilibrium. However, given an individual choice between a lottery with equal probabilities of the same outcomes and the sure payoff as in the Nash point, the lottery is chosen by the subjects. This result is robust against a few variations. We explain our result as selecting risk-dominance over payoff dominance in equilibrium.

U2 - 10.1007/s10683-020-09647-x

DO - 10.1007/s10683-020-09647-x

M3 - Journal article

VL - 23

SP - 1178

EP - 1204

JO - Experimental Economics

JF - Experimental Economics

SN - 1386-4157

ER -