Myopic behavior and overall utility maximization - A study of linked hawks and doves -

Siegfried Berninghaus (), Stephan Schosser () and Bodo Vogt ()
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Siegfried Berninghaus: Karlsruhe Institute of Technology
Stephan Schosser: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg
Bodo Vogt: Faculty of Management, Economics and Social Sciences, University of Cologne

No 150014, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: At present, in the domain of simultaneous action selection and network formation games, game-theoretic behavior and experimental observations are not consistent. While theory typically predicts inefficient outcomes for (anti- )co-ordination games, experiments show that subjects tend to play efficient (non-Nash) strategy profiles. One reason for this discrepancy is the tendency to model corresponding games as one-shot and derive predictions. In this paper, we calculate the equilibria for a finitely repeated version of the Hawk-Dove game with endogenous network formation and show that the repetition leads to additional sub-game perfect equilibria; namely, the efficient strategy profiles played by human subjects. However, efficiency crucially depends on the design of the game. This paper theoretically demonstrates that, although technically feasible, the efficient profiles are not sub-game perfect equilibria if actions are fixed after an initial period. We confirm this result using an experimental study that demonstrates how payoffs are higher if actions are never fixed.

Keywords: Network; Hawk-Dove; Game theory; Behavioral experiment; Finitely re- peated game (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D85 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2015-07
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:mag:wpaper:150014

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