Stake size and the power of focal points in coordination games: Experimental evidence

Melanie Parravano, Odile Poulsen

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Abstract

We collect data from symmetric and asymmetric coordination games with a focal point and vary the stake size. The data show that in symmetric games coordination on the label-salient strategy increases with stake size. By contrast, in asymmetric games the coordination rates do not vary with stake size and are close to the levels predicted by both the mixed Nash equilibrium and the level-kmodel used by Crawford et al.(2008). These findings suggest that players’ mode of reasoning, and the extent to which it can be explained by team reasoning or a level-kmodel, crucially depends on the symmetry or asymmetry of the coordination payoffs.
Original languageEnglish
Pages (from-to)191–199
JournalGames and Economic Behavior
Volume94
Early online date8 May 2015
DOIs
Publication statusPublished - Nov 2015

Keywords

  • Coordination
  • Stake size
  • Payoff asymmetry
  • Labels
  • Focal point

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