FORWARD INDUCTION IN THE BATTLE-OF-THE-SEXES GAMES

This paper provides experimental evidence on forward induction as a re finement criterion In the basic extensive form, one of the two players chooses to play a battle-of-the-sexes game or to receive a certain pa yoff. According to forward induction, choosing to play the game is a s ignal about intended action. Though the presence of the outside option changes play, we find only limited support for the forward-induction hypothesis. The effects of the outside option also reflect the creatio n of a focal point through the asymmetry created by offering the outsi de option to one of the two players.