A unified approach to comparative statics puzzles in experiments

Many experimental studies implement two versions of one game for which agents’ behavior is fundamentally different even though the Nash prediction is the same. This paper provides a novel explanation of such findings. Starting from the observation that many of the games under consideration satisfy the strategic-complementarity property, I obtain predictions for the direction of adjustment in response to parameter changes which do not require calculation of the equilibrium. I show that these predictions are in line with the experimental evidence. Further, I provide a behavioral justification of the approach, and I explore the relation to alternative explanations based on equilibrium selection theories and the quantal response equilibrium. ––––––––––––––––––––– *Affiliation: Armin Schmutzler, Sozialökonomisches Institut, Blümlisalpstrasse 10, CH-8006 Zürich, e-mail: [email protected] The paper benefited from discussions with Rabah Amir, Susan Athey, Antonio Cabrales, Gary Charness, Martin Dufwenberg, Eric Eyster, Armin Falk, Ernst Fehr, Urs Fischbacher, Frank Heinemann, Hans Gersbach, Jacob Goeree, Michael Kosfeld, Meg Meyer, Axel Ockenfels, Markus Reisinger, Bettina Rockenbach, Klaus Schmidt, Xavier Vives and Muhamet Yildiz and from seminar audiences in Copenhagen, Dortmund, Erfurt, Fribourg, Konstanz and Zürich. Donja Darai, Dirk Engelmann, Josef Falkinger, Dennis Gärtner, Daniel Halbheer, Hans Normann and Maria Saez-Marti provided helpful comments on the manuscript.