Taking Turns in Continuous Time

This paper examines the impact of continuous-time interactions on the dynamics of repeated battle of the sexes games with laboratory experiments. In discrete time, players often coordinate by alternating each period between the two pure Nash equilibria. In continuous time, players can respond more quickly but must contend with a very rich strategy space and with the lack of a natural coordination device. The experiment also examines a new hybrid-time environment that runs in continuous time but offers a discrete payoff-irrelevant signal. The results suggest that the hybrid signal device greatly facilitates both coordination and alternation. Players generally tend to alternate asynchronously in continuous time, and the transitions between pure Nash equilibria are mainly driven by the “disadvantaged player”.

Keywords: Battle of the sexes, Continuous time, Repeated games, Laboratory experiment.

JEL Classification: C72, C73, C92