We study how people arranged in a random network play games involving either strategic substitutes or strategic complements and either complete or incomplete information about the structure of the network, so that our results will have more applicability to field environments. Under complete information, we find that people quite frequently play the stochastically-stable(inefficient) equilibrium when the game involves strategic substitutes, but instead play the efficient one if the game involves strategic complements. In practical terms, this means that equilibrium multiplicity may not be a major concern. We find that the actions and realized outcomes under incomplete information depend both strongly on both the degree and the connectivity. With strategic complements, characterized by multiple equilibria, people begin by playing the efficient equilibrium, but eventually converge to the inefficient one. Finally, our results provide an impressive behavioral confirmation of the theoretical predictions derived by Galeotti, Goyal, Jackson, Vega-Redondo and Yariv (2010).
CREED Seminars Amsterdam
- Speaker(s)
- Gary Charness (UC Santa Barbara)
- Date
- 2011-10-20
- Location
- Amsterdam