When Are Mixed Equilibria Relevant?
39 Pages Posted: 5 Sep 2019
Date Written: August 28, 2019
Mixed Nash equilibria are a cornerstone of game theory, but their empirical rel evance has always been controversial. We study in the laboratory two games whose unique NE is in completely mixed strategies; other treatments include the matching protocol (pairwise random vs population mean-matching), whether time is discrete or continuous, and whether players can specify mixtures or only pure strategies. Compar ing point predictions, NE always does better than maximin and often does no worse than Logit QRE. NE predicts better than Center (50-50 mixes) under mean-matching, but otherwise not as well. By contrast, in a dominance solvable game, NE predicts bet ter than alternatives in all treatments. Qualitative and quantitative dynamic models capture regularities across all treatments.
Keywords: Nash equilibrium, minimax, mixed strategy, directional learning, laboratory experiment
JEL Classification: C72, C73, C92
Suggested Citation: Suggested Citation