Testing Models of Strategic Uncertainty: Equilibrium Selection in Repeated Games
In repeated-game applications where both the collusive and non-collusive outcomes can be supported as equilibria, researchers must resolve underlying selection questions if theory will be used to understand counterfactual policies. One guide to selection, based on clear theoretical underpinnings, has shown promise in predicting when collusive outcomes will emerge in controlled repeated-game experiments. In this paper we both expand upon and experimentally test this model of selection, and its underlying mechanism: strategic uncertainty. Adding an additional source of strategic uncertainty (the number of players) to the more-standard payoff sources, we stress test the model. Our results affirm the model as a tool for predicting when tacit collusion is likely/unlikely to be successful. Extending the analysis, we corroborate the mechanism of the model. When we remove strategic uncertainty through an explicit coordination device, the model no longer predicts the selected equilibrium.
Code (0)
등록된 구현이 없습니다.
Tasks
counterfactualSimilar Papers 제목 키워드 기반
Reputation and Risk in Regimes
How valuable is reputation to a regime seeking to deter uprisings? I show the answer depends almost entirely on players' strategic uncertainty over other players actions. Without higher-order uncertainty, reputational ef…
Unraveling Coordination Problems
Strategic uncertainty complicates policy design in coordination games. To rein in strategic uncertainty, the Planner in this paper connects the problem of policy design to that of equilibrium selection. We characterize t…
Reasonably reasoning AI agents can avoid game-theoretic failures in zero-shot, provably
As autonomous AI agents increasingly mediate online platform markets, a fundamental question emerges: do these markets generate stable strategic outcomes? In repeated strategic environments, the Nash equilibrium provides…
Institutional Noise, Strategic Deviation, and Intertemporal Collapse: A Formal Model of Miner Behaviour under Protocol Uncertainty
This paper develops a formal game-theoretic model to examine how protocol mutability disrupts cooperative mining behaviour in blockchain systems. Using a repeated game framework with stochastic rule shocks, we show that …
Robust Network Targeting with Multiple Nash Equilibria
Many policy problems involve designing individualized treatment allocation rules to maximize the equilibrium social welfare of interacting agents. Focusing on large-scale simultaneous decision games with strategic comple…
counterfactual