Mixed Strategies and Iterative Elimination of Strongly Dominated Strategies: An Experimental Investigation of States of Knowledge

Posted: 22 Sep 2001

See all articles by Amnon Rapoport

Amnon Rapoport

University of Arizona - Eller College of Management

Wilfred Amaldoss

Duke University - Fuqua School of Business

Abstract

The iterative elimination of strongly dominated strategies (IESDS) and mixed-equilibrium solution concepts are studied in an iterated two-person investment game with discrete strategy spaces, non-recoverable investments, and either equal or unequal investment capital. In this game, the player investing the largest amount wins the competition and receives a fixed reward; ties are counted as losses. Both cases of symmetric and asymmetric dyads are studied theoretically and experimentally. Results from two experiments provide support for the mixed-strategy equilibrium solution on the aggregate but not the individual level, and evidence for a hierarchy of bounded IESDS.

Keyword(s): Mixed strategies, Iterative deletion of strongly dominated strategies, Bounded rationality, Adaptive learning

JEL Classification: C72, C92

Suggested Citation

Rapoport, Amnon and Amaldoss, Wilfred, Mixed Strategies and Iterative Elimination of Strongly Dominated Strategies: An Experimental Investigation of States of Knowledge. Journal of Economic Behavior & Organization, Vol. 42, No. 4, August 1, 2000. Available at SSRN: https://ssrn.com/abstract=251384

Amnon Rapoport (Contact Author)

University of Arizona - Eller College of Management ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
520-621-9325 (Phone)
520-621-4171 (Fax)

Wilfred Amaldoss

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-1894 (Phone)

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