Ongoing quest for QWERTY

Abstract

First, we replicate the remarkable result of Hossain & Morgan (AER 2009), in which subjects in an experimental market tip almost perfectly to the superior platform even if an inferior platform enjoys initial monopoly. Next, we show that this result disappear when seemingly innocent increases in out-of-equilibrium payoffs are introduced. The inflated payoffs do not alter payoff- or risk-dominance relations, and does not impact on players' security levels. We conclude that the need for a theory of equilibrium selection cannot be bypassed by appealing to the realities of the (experimental) market place.