THE EAST END, THE WEST END, AND KING'S CROSS: ON CLUSTERING IN THE FOUR-PLAYER HOTELLING GAME

We study experimentally a standard four-player Hotelling location game with a uniform density of consumers and inelastic demand. The pure strategy Nash equilibrium configuration consists of two firms located at one quarter of the "linear city," and the other two at three quarters. We do not observe convergence to such an equilibrium. In our experimental data we find three clusters. Besides the direct proximity of the two equilibrium locations, this concerns the focal midpoint. Moreover, we observe that whereas this midpoint appears to become more notable over time, other focal points fade away. We explain how these observations are related to best-response dynamics, and to the fact that the players rely on best-responses in particular when they are close to the equilibrium configuration.     

Creatively Labeling Behavior in Individual and Group Counseling

The authors make a case for the accurate labeling of behavior at the appropriate time in the counseling process and caution against the kind of labeling of a person which results in stereotyping and counseling ineffectiveness. They present a list of seven criteria to be considered if behavior is to be accurately labeled and advocate the use of metaphors, especially in group counseling, to label certain kinds of behavior     

'From Exchange It Comes to Tears'. A Dutch 'Folk Theorem' Reconsidered

A Dutch 'folk theorem' holds that 'from exchange it comes to tears'. This seems to contradict the basic idea found in economics that exchange and trade can make both sides better off. We show that the 'folk theorem' has a better theoretical foundation than sometimes thought, as it is vindicated by the equilibrium of an exchange game with two-sided asymmetric information. We, then, explain the practical value of such 'folk wisdom' in the real world by showing why players might be unlikely to learn such an equilibrium strategy.