Platform selection in the lab

Tuesday, 08 April 2014 - Leif Helland, Tom-Reiel Heggedal

Emerging literature explores experimental platform selection games. These games converge rapidly on the superior platform under a wide range of conditions. We replicate the remarkable results of Hossain and Morgan (2009) in which such a game tips almost perfectly to the superior platform. Next, we show that platform coordination fails when seemingly innocent increases in out-of-equilibrium payo§s are introduced. The ináated payo§s keep the best reply structure unchanged and do not ináuence playersísecurity levels. Our design allows control for the explanatory force of risk dominance. We Önd that equilibrium selection theory is unable to account for coordination failure while observed behavior is consistent with non-rational learning. Furthermore, and contrary to the literature, we Önd that e¢ ciency su§ers when an inferior platform is granted initial monopoly.
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