| By: |
Geoffrey Dunbar (Simon Fraser University);
Juan Tu (Queen's University);
Ruqu Wang (Queen's University);
Xiaoting Wang (Brock University) |
| Abstract: |
In this paper, we re-examine various previous experimental studies of the
Centipede Game in the literature. These experiments found that players rarely
follow the subgame-perfect equilibrium strategies of the game, and various
modifications to the game were proposed to explain the outcomes of the
experiments. We here offer yet another modification. Players have a choice of
whether or not to believe that their opponents use subgame-perfect equilibrium
strategies. We define a `behavioral equilibrium' for this game. This
equilibrium concept can reproduce the outcomes of those experiments. |
| Keywords: |
centipede games, game theory, experimental economics, behavioral economics |
| JEL: |
C72 C91 |
| Date: |
2006–02 |
| URL: |
http://d.repec.org/n?u=RePEc:qed:wpaper:1033&r=evo |