Scandinavian Working Papers in Economics

UiS Working Papers in Economics and Finance,
University of Stavanger

No 2021/2: On the empirical relevance of correlated equilibrium

Dan Friedman, Jean Paul Rabanal (jeanpaul.rabanal@uis.no), Olga A Rud (olga.rud@uis.no) and Shuchen Zhao
Additional contact information
Jean Paul Rabanal: University of Stavanger, Postal: University of Stavanger, NO-4036 Stavanger, Norway
Olga A Rud: University of Stavanger, Postal: University of Stavanger, NO-4036 Stavanger, Norway

Abstract: Can an efficient correlated equilibrium emerge without any exogenous benevolent agent providing coordinating signals? Theoretical work in adaptive dynamics suggests a positive answer, which we test in a laboratory experiment. In the well-known Chicken game, we observe time average play that is close to the asymmetric pure Nash equilibrium in some treatments, and in other treatments we observe collusive play. In a game resembling rock-paper-scissors or matching pennies, we observe time average play close to a correlated equilibrium that is more efficient than the unique Nash equilibrium. Estimates and simulations of adaptive dynamics capture much of the observed regularities.

Keywords: Correlated equilibrium; Laboratory experiment; Adaptive dynamics

JEL-codes: A00

34 pages, September 29, 2021

Full text files

uis_wps_2021_02_friedman_rabanal_rud_zhao.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Bernt Arne Odegaard (bernt.a.odegaard@uis.no)
Report other problems with accessing this service to Sune Karlsson (sune.karlsson@oru.se).

RePEc:hhs:stavef:2021_002This page generated on 2024-09-13 22:17:13.