Continuous Games in the Laboratory

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This award is funded under the American Recovery and Reinvestment Act of 2009(Public Law 111-5).This award funds the development of new software for conducting economic experiments at the LEEPS lab of the University of California at Santa Cruz. The Continuous Games (ConG) software enables researchers to investigate how human players with clear financial incentives interact strategically in continuous time, when they have continuous ranges of choices, and when they interact anonymously with dozens of other human players.In partnership with other laboratories in the US and around the world, LEEPS researchers are using the new software to conduct original research on a variety of different strategic interactions. These include games of conflict (e.g., prisoner's dilemma and social dilemmas) and games of coordination. Untested theory predicts much more efficient outcomes in continuous time than in standard discrete time settings. Certain other sorts of strategic interaction are predicted to lead to random behavior (?mixed strategies?), but in standard settings the predictions have not fared very well. They may do better with ConG, when players can adjust their mixtures in continuous time. In other sorts of interaction, the strategic character gradually changes over time, and some theories predict lock-in effects. Finally, ConG will enable investigation of some important applied games ? such as strategic pricing, quantity setting and location choice ? in more realistic, continuous time settings.The completed software package will be made available to the research community via the National Digital Library facility called EconPort. Researchers will be able to run many sorts of new strategic interactions merely by downloading the software and resetting the parameters. They also will be able to run new and quite different continuous games by programming only the graphic elements of the player screens and the stage game payoff functions; the deeper programming (e.g., of message passing and timing) will already be taken care of. Using standard Java-enabled web browsers, researchers will be able to run a wide variety of stage games with asynchronous choices and response times of less than a tenth of a second. The work will benefit the national research community directly, especially since game theory now plays a central role in economics, political science, sociology, evolutionary biology, ecology and computer science. In many settings, continuous time is a better description of the world than discrete time and may serve as a better guide to field applications and policy. Evidence on how behavior unfolds in continuous settings will therefore bring game theory closer to the field and enhance its value in applications. Specifics are impossible to know in advance, but conceivable indirect impacts range from more efficient use of congestible computer resources to more sophisticated antitrust policy.