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Experimental game theory

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  • Güth, Werner

Abstract

Whereas orthodox game theory relies on the unrealistic assumption of (commonly known) perfect rationality, participants in game playing experiments are at best boundedly rational. This makes it necessary to supplement orthodox game theory by a behavioral theory of game playing. We first point out that this applies also to (one person-) decision theory. After reviewing the influential experiments based on repeated games and the ultimatum game the typical reactions to the striking experimental results are categorized. Further sections are devoted to alternating offer bargaining and characteristic function experiments.

Suggested Citation

  • Güth, Werner, 2000. "Experimental game theory," SFB 373 Discussion Papers 2000,111, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    • Handle: RePEc:zbw:sfb373:2000111
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-836, July.
    3. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
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