Sequential equilibrium in monotone games: A theory-based analysis of experimental data

Syngjoo Choi, Douglas Gale, Shachar Kariv

    Research output: Contribution to journalArticlepeer-review


    A monotone game is an extensive-form game with complete information, simultaneous moves and an irreversibility structure on strategies. It captures a variety of situations in which players make partial commitments and allows us to characterize conditions under which equilibria result in socially desirable outcomes. However, since the game has many equilibrium outcomes, the theory lacks predictive power. To produce stronger predictions, one can restrict attention to the set of sequential equilibria, or Markov equilibria, or symmetric equilibria, or pure-strategy equilibria. This paper explores the relationship between equilibrium behavior in a class of monotone games, namely voluntary contribution games, and the behavior of human subjects in an experimental setting. Several key features of the symmetric Markov perfect equilibrium (SMPE) are consistent with the data. To judge how well the SMPE fits the data, we estimate a model of Quantal Response Equilibrium (QRE) [R. McKelvey, T. Palfrey, Quantal response equilibria for normal form games, Games Econ. Behav. 10 (1995) 6-38; R. McKelvey, T. Palfrey, Quantal response equilibria for extensive form games, Exp. Econ. 1 (1998) 9-41] and find that the decision rules of the QRE model are qualitatively very similar to the empirical choice probabilities.

    Original languageEnglish (US)
    Pages (from-to)302-330
    Number of pages29
    JournalJournal of Economic Theory
    Issue number1
    StatePublished - Nov 2008


    • Experiment
    • Markov perfect
    • Mixed strategy
    • Monotone games
    • Pure strategy
    • Quantal response equilibrium
    • Refinements

    ASJC Scopus subject areas

    • Economics and Econometrics


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