Platform selection in the lab

Abstract

Emerging literature explores experimental platform selection games. These games con- verge rapidly on the superior platform under a wide range of conditions. We replicate the remarkable results of Hossain and Morgan (2009) in which such a game tips almost perfectly to the superior platform. Next, we show that platform coordination fails when seemingly innocent increases in out-of-equilibrium payo¤s are introduced. The in ated payo¤s keep the best reply structure unchanged and do not in uence players security levels. Our de- sign allows control for the explanatory force of risk dominance. We nd that equilibrium selection theory is unable to account for coordination failure while observed behavior is con- sistent with non-rational learning. Furthermore, and contrary to the literature, we nd that e¢ ciency su¤ers when an inferior platform is granted initial monopoly.