Overcoming coordination failure in games with focal points: An experimental investigation

David Rojo Arjona, Stefania Sitzia, Jiwei Zheng

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Abstract

We experimentally test whether increasing the salience of payoff-irrelevant focal points (Schelling, 1960) can counteract the negative impact of conflicts of interest on coordination. The intuition is that, in the presence of conflict, the solution to the coordination dilemma offered by the focal point loses importance. Increasing its salience increases its relevance and, therefore, coordination success. When we vary label salience between subjects, we find support for this conjecture in games with a constant degree of conflict, similar to battle of the sexes games, but not in games that feature outcomes with different degrees of payoff inequality and efficiency. In an additional experiment in which we vary label salience within subjects, choices are found not to be affected by our salience manipulation. Yet, the proportion of choices consistent with the focal point is significantly greater than that in the between-subject design.
Original languageEnglish
Pages (from-to)505-523
Number of pages19
JournalGames and Economic Behavior
Volume136
Early online date24 Oct 2022
DOIs
Publication statusPublished - Nov 2022

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