A unified approach to comparative statics puzzles in experiments |
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| Authors: | Armin Schmutzler |
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| Institution: | 1. Columbia University, United States;2. NBER, United States;3. CEPR, United Kingdom;4. Caltech, United States;1. Department of Management, Middle Tennessee State University, Murfreesboro, TN, USA;2. School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai, China;3. Jindal School of Management, University of Texas at Dallas, Richardson, TX, USA |
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| Abstract: | The paper shows that several game-theoretic solution concepts provide similar comparative statics predictions over a wide class of games. I start from the observation that, in many experiments, behavior is affected by parameter shifts that leave the Nash equilibrium unchanged. I explain the direction of change with a heuristic structural approach, using properties such as strategic complementarities and increasing differences. I show that the approach is consistent with general comparative statics results for (i) the Nash equilibrium of a game with perturbed payoff functions, (ii) the quantal response equilibrium, (iii) level-k reasoning. I also relate the structural approach to equilibrium selection concepts. |
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