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Knowing me, knowing you: an experiment on mutual payoff information in the stag hunt and Prisoner's Dilemma

Published online by Cambridge University Press:  01 January 2025

Hazem Alshaikhmubarak Open the ORCID record for Hazem Alshaikhmubarak [Opens in a new window] ,
David Hales Open the ORCID record for David Hales [Opens in a new window] ,
Maria Kogelnik Open the ORCID record for Maria Kogelnik [Opens in a new window] ,
Molly Schwarz Open the ORCID record for Molly Schwarz [Opens in a new window]  and
C. Kent Strauss Open the ORCID record for C. Kent Strauss [Opens in a new window]
Hazem Alshaikhmubarak*
Affiliation:
King Faisal University, Al Hofuf, Saudi Arabia
David Hales
Affiliation:
Global Innovations Bank, Kiester, MN, USA
Maria Kogelnik
Affiliation:
Yale University, New Haven, CT, USA
Molly Schwarz
Affiliation:
Federal Communications Commission, Washington, DC, USA
C. Kent Strauss
Affiliation:
University of California Santa Barbara, Santa Barbara, CA, USA
*
[email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We experimentally study how mutual payoff information affects strategic play. Subjects play the Prisoner's Dilemma or Stag Hunt game against randomly re-matched opponents under two information treatments. In our partial-information treatment, subjects are shown only their own payoff structure, while in our full-information treatment they are shown both their own and their opponent's payoff structure. In both treatments, they receive feedback on their opponent's action after each round. We find that mutual payoff information initially facilitates reaching the socially optimal outcome in both games. Play in the Prisoner's Dilemma converges toward the unique Nash equilibrium of the game under both information treatments, while in the Stag Hunt mutual payoff information has a substantial impact on play and equilibrium selection in all rounds of the game. Belief-learning model estimations and simulations suggest these effects are driven by both initial play and the way subjects learn.

Keywords

Payoff informationStag huntPrisoner's dilemmaEconomics experiments

JEL classification

C91: Laboratory, Individual Behavior C71: Cooperative Games D81: Criteria for Decision-Making under Risk and Uncertainty D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness D82: Asymmetric and Private Information • Mechanism Design
Type
Original Paper
Information
Journal of the Economic Science Association , Volume 10 , Issue 2: Special Issue: Behavioral and Experimental Economics for Innovative Policy-Making (Articles 1 to 3) , December 2024 , pp. 428 - 441
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2024.

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Footnotes

Molly Schwarz: The opinions expressed in this article are those of the author and do not necessarily represent the views of the Federal Communications Commission or the United States Government.

A previous version of this paper was circulated as “Knowing Me, Knowing You: An Experiment on Mutual Payoff Information and Strategic Uncertainty.” We thank Ryan Oprea, Emanuel Vespa, and Sevgi Yuksel for their guidance and encouragement. We are grateful to participants of the UCSB Experimental Economics Seminar, Terri Kneeland, and Yi Zheng for helpful comments and suggestions. Emanuel Vespa inspired and instigated this work by noting that partial-information games are understudied. Funding from the UCSB Department of Economics is gratefully acknowledged. This study obtained IRB approval at UCSB. The replication material for the study is available at http://doi.org/10.17605/OSF.IO/Y2JS7.

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