THE LIMITATIONS OF THE POSITIONAL ORDER EFFECT - CAN IT SUPPORT SILENT THREATS AND NONEQUILIBRIUM BEHAVIOR

Common knowledge about the chronological order of play in extensive fo rm games has been shown in several. studies to change the behavior of the players by conferring an advantage to the first mover. To study th e validity and limitations of this positional order effect, we study s equential battle-of-sexes games where it predicts an unannounced commi tment to a weakly dominated strategy, and a class of 2 x 2 games with unique equilibria where it even predicts non-equilibrium behavior. We observe that the effect weakens considerably in the former and vanishe s completely in the latter. Thus, the study provides evidence about th e importance of physical temporal ordering for real life economic deci sions. (C) 1998 Elsevier Science B.V.