ABREU-MATSUSHIMA MECHANISMS - EXPERIMENTAL-EVIDENCE

Abreu-Matsushima mechanisms can be applied to a broad class of games t o induce any desired outcome as the unique rationalizable outcome. We conduct experiments investigating the performance of such mechanisms i n two simple coordination games. In these games one pure-strategy equi librium is ''focal''; we assess the efficacy of Abreu-Matsushima mecha nisms for implementing the other pure-strategy equilibrium outcome. Ab reu-Matsushima mechanisms induce some choices consistent with the desi red outcome, but more choices reflect the focal outcome. Moreover, ''s trengthening'' the mechanism has a perverse effect when the desired ou tcome is a Pareto-dominated risk-dominated equilibrium. Journal of Eco nomic Literature Classification Number: C7. (C) 1996 Academic Press, I nc.