EQUILIBRIUM SELECTION IN EXPERIMENTAL GAMES WITH RECOMMENDED PLAY

This paper presents the results of experimental games with multiple Nash equilibria in which subjects were given suggestions for their play. This procedure allows for a direct test of the self-enforcement condition implicit in the Nash equilibrium concept. The results show that perfectness has cutting power in simple single-stage games. Also, off-equilibrium payoffs influence subjects' behavior. For two-stage games we find support for the position that subgame perfect equilibria are strategically stable and weak support for the concept of forward induction. Journal of Economic Literature Classification Number: 215. (C) 1995 Academic Press, Inc.