Who Acts More Like a Game Theorist? Group and Individual Play in a Sequential 
Market Game and the Effect of the Time Horizon

Tan, Fangfang; Müller, Wieland

Item

ITEM ACTIONSEXPORT

Add to Basket

Local TagsRelease HistoryDetailsSummary

Released

Paper

Who Acts More Like a Game Theorist? Group and Individual Play in a Sequential Market Game and the Effect of the Time Horizon

MPS-Authors

/persons/resource/persons49219

Tan, Fangfang
Public Economics, MPI for Tax Law and Public Finance, Max Planck Society;

External Resource

http://ssrn.com/abstract=1945196
(Preprint)

Fulltext (restricted access)

There are currently no full texts shared for your IP range.

Fulltext (public)

There are no public fulltexts stored in PuRe

Supplementary Material (public)

There is no public supplementary material available

Citation

Tan, F., & Müller, W. (2011). Who Acts More Like a Game Theorist? Group and Individual Play in a Sequential Market Game and the Effect of the Time Horizon. Working Paper of the Max Planck Institute for Tax Law and Public Finance, 2011-15.

Cite as: https://hdl.handle.net/11858/00-001M-0000-000F-46CB-1

Abstract

Previous experimental results on one-shot sequential two-player games show that group decisions are closer to the subgame-perfect Nash equilbirum than individual decisions. We extend the analysis of inter-group versus inter-individual decision making to a Stackelberg market game, by running both one-shot and repeated markets. Whereas in the one-shot markets we find no significant differences in the behavior of groups and individuals, we find that the behavior of groups is further away from the subgame-perfect equilibrium of the stage game than that of individuals. To a large extent, this result is independent of the method of eliciting choices (sequential or strategy method) and the method used to account for observed first- and second-mover behavior. We provide evidence on followers' response functions and electronic chats to offer an explanation for the differential effect that the time horizon of interaction has on the extent of individual and group players' (non)conformity with subgame perfectness.