Group Play in Games and the Role of Consent in Network Formation

Abstract

We study games played between groups of players, where a given group decides which strategy it will play through a vote by its members. When groups consist of two voting players, our games can also be interpreted as network-formation games. In experiments on Stag Hunt games, we find a stark contrast between how groups and individuals play, with payoffs playing a primary role in equilibrium selection when individuals play, but the structure of the voting rule playing the primary role when groups play.

We develop a new solution concept, robust-belief equilibrium, which explains the data that we observe. We provide results showing that this solution concept has application beyond the particular games in our experiments.

Keywords: Groups, Networks, Game Theory, Equilibrium Selection, Equilibrium Refinement, Majority Voting, Group Play, Robust-belief Equilibrium

JEL Classification: D85, A14, C72, C91, D71, D72