MEASURING PLAYERS LOSSES IN EXPERIMENTAL GAMES

In some experiments rational players who understand the structure of t he game could improve their payoff. We bound the size of the observed losses in several such experiments. To do this, we suppose that observ ed play resembles an equilibrium because players learn about their opp onents' play. Consequently, in an extensive-form game, some actions th at are not optimal given the true distribution of opponents' play coul d be optimal given available information. We find that average losses are small: $0.03 to $0.64 per player with stakes between $2 and $30. I n one of the three experiments we examine, this also implies a narrow range of outcome.