Predictive superiority of the beta-characteristic function in cooperative non-sidepayment N-person games

Abstract

This article reports an experimental study of decision-making outcomes in cooperative non-sidepayment games. The objective of this test was to determine which characteristic function, V _α(S) or V _β(S), provides the most accurate basis for payoff predictions from solution concepts. The experiment tested three solution concepts (core, stable set, imputation set) in the context of 5-person, 2-strategy non-sidepayment games. Predictions from each of the three solution concepts were computed on the basis of both V _α(S) and V _β(S), making a total of six predictive theories under test. Consistent with earlier studies (Michener et al., 1984a; Michener et al., 1985), two basic findings emerged. First, the data show that for each of the solutions tested, the prediction from any solution concept computed from Vβ(S) was more accurate than the prediction from the same solution concept computed from V _α(S). Second, the β-core was the most accurate of the six theories tested. Overall, these results support the view that V _β(S) is superior to V _α(S) as a basis for payoff predictions in cooperative non-sidepayment games.