Theoretical and Applied Economics
No. 10 / 2014 (599)
Mixed strategy Nash Equilibrium and Quantal Response Equilibrium. An experimental comparison using RPS games
National School of Political and Administrative Studies Bucharest, Romania
Abstract. In this paper I test the hypothesis according to which the Quantal Response Equilibrium (QRE) solution concept significantly outperforms the Mixed Strategy Nash Equilibrium (MSNE) in experimental situations. The testing ground for the hypothesis is an experiment with variations of the RPS game applied in June 2013 to students from various universities in Bucharest. The results of the experiment show that the QRE solution does not perform substantially better than the Nash Equilibrium for two of the three games studied and that it does represent a slight improvement in only one of the games. This result lies in stark contrast to the bulk of the literature developed thusfar on the QRE solution.
Contents
How growth-friendly are productive public expenditures? An empirical analysis for Eastern Europe
The validity of Marshall-Lerner condition in Turkey: A cointegration approach
Turn Of the Month Effect and Financial Crisis: A new explanation from the Greek Stock Market (2002-2012)
Econometric model used in the capital market analysis
Economic order, catallactics and entrepreneurship
Public-private partnership in the context of regional development – a solution for renewable energy projects?
Mixed strategy Nash Equilibrium and Quantal Response Equilibrium. An experimental comparison using RPS games