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Advances in Understanding Strategic Behaviour Game Theory, Experiments and Bounded Rationality
Edited by
Steffen Huck
Advances in Understanding Strategic Behaviour
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Advances in Understanding Strategic Behaviour Game Theory, Experiments and Bounded Rationality .. Essays in Honour of Werner Guth
Edited by Steffen Huck
Selection, editorial matter and Chapter 16 © Steffen Huck 2004 Chapters 115 © the contributors 2004 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2004 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin^s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 1403941521 hardback ISBN 140394167X paperback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Advances in understanding strategic behaviour:game theory, experiments, and bounded rationality/edited by Steffen Huck. p. cm. Includes bibliographical references and index. ISBN 1403941521 “ ISBN 140394167X (pbk.) 1. Game theory. 2. Decision making. 3. Econometric models. I. Güth, Werner, 1944 II. Huck, Steffen, 1968 HB144.A38 2004 519.3“dc22 2004056082 10 9 8 7 6 5 4 3 2 1 13 12 11 10 09 08 07 06 05 04 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne
Contents
List of Figures
vii
List of Tables
ix
Preface
xi
Acknowledgements
xiv
List of Contributors
xv
1
Boundedly Rational Qualitative Reasoning on Comparative Statics Reinhard Selten
1
2
Complexity Constraints and Adaptive Learning: An Example Tilman Börgers and Antonio J. Morales
3
Vengefulness Evolves in Small Groups Daniel Friedman and Nirvikar Singh
28
4
Network Formation and Co-ordination Games Siegfried K. Berninghaus and Bodo Vogt
55
5
Specific Skills, Imperfect Information and Job Rationing Helmut Bester
73
6
Testing Game Theory Jörgen W. Weibull
85
7
A Dialogue Concerning the Nature of Rationality Hartmut Kliemt and Axel Ockenfels
105
8
Behavioural Game Theory: Thinking, Learning and Teaching Colin F. Camerer, Teck-Hua Ho and Juin Kuan Chong
120
9
Double Auction Markets with Stochastic Supply and Demand Schedules: Call Markets and Continuous Auction Trading Mechanisms John H. Kagel v
9
181
vi Contents
10
11
12
Multistage Sealed-bid k-Double-Auctions: An Experimental Study o