Figure 1.

Experiment based on the traveler’s dilemma game, using randomly matched student subjects who made claim decisions independently in a sequence of 10 periods. Earnings ranged from $24 to $44 and were paid in private, immediately after the experiment. The frequency of actual decisions for the final five periods is indicated by the blue bars for R = 50, by the yellow bars for R = 25, and by the red bars for R = 10. With R = 50, the average claim was quite close to the Nash prediction of 80, but, with R = 10, the average claim started high (at ≈180) and moved away from the Nash prediction, ending up at 186 in the final five periods. The observed average claim varies with the penalty/reward parameter R in an intuitive manner (a higher R results in lower claims), in sharp contrast with the Nash prediction of 80, independent of R.