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In Support of Trigger Strategies: Experimental Evidence from Two‐Person Noncooperative Games
Author(s) -
Mason Charles F.,
Phillips Owen R.
Publication year - 2002
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1430-9134.2002.00685.x
Subject(s) - cournot competition , punishment (psychology) , economics , affect (linguistics) , microeconomics , fictitious play , repeated game , computer science , game theory , mathematical economics , psychology , social psychology , communication
Cooperative equilibria can be supported in a repeated game when players use trigger strategies. This paper tests how well trigger strategies explain behavior in two‐person experimental games. Reducing payoffs for choices larger than the Cournot level induces smaller average outputs, behavior generally consistent with trigger strategy models. Reducing payoffs for choices well above the Cournot level will not affect behavior if actions are consistent with a trigger strategy involving longer‐lived, less intense punishment phases (the grim‐reaper strategy), but would matter for trigger strategies with short‐lived but intense punishment phases. Results show that behavior is most consistent with the former.