COORDINATION IN MARKET ENTRY GAMES WITH SYMMETRICAL PLAYERS

We report the results of two experiments designed to study tacit coordination in a class of market entry games with linear payoff functions, binary decisions, and zero entry costs, in which each of n = 20 players must decide on each trial whether or not to enter a market whose capacity is public knowledge. The results show that although the subjects differ considerably from one another in their decision policies, tacit coordination emerges quickly on the aggregate level and is accounted for most successfully by the Nash equilibrium solution for noncooperative n-person games. (C) 1995 Academic Press, Inc.