The focality of dominated compromises in tacit coordination situations: Experimental evidence

Zoë Bett; Anders Poulsen; Odile Poulsen

doi:10.1016/j.socec.2015.11.004

The focality of dominated compromises in tacit coordination situations: Experimental evidence

Zoë Bett (Lead Author), Anders Poulsen, Odile Poulsen

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Abstract

We experimentally investigate if subjects in a tacit coordination situation with a conflict of interest tend to choose an equal compromise, even if it is strictly dominated. The data show that this is the case, as long as the compromise payoffs are not too low. Game comparisons suggest that choosing a dominated compromise is a focal point that allows subjects to avoid a costly coordination failure.

Original language	English
Pages (from-to)	29-34
Number of pages	6
Journal	Journal of Behavioral and Experimental Economics
Volume	60
Early online date	21 Dec 2015
DOIs	https://doi.org/10.1016/j.socec.2015.11.004
Publication status	Published - Feb 2016

Keywords

Coordination
equality
efficiency
focal point
level-k model
inequity aversion

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10.1016/j.socec.2015.11.004

Bett Poulsen Poulsen_Final AcceptedAccepted author manuscript, 134 KBLicence: CC BY-NC-ND

Anders Poulsen
- A.Poulsenuea.acuk
- School of Economics - Associate Professor
- Centre for Behavioural and Experimental Social Science - Member
- Behavioural Economics - Member
- Environment, Resources and Conflict - Member
Person: Research Group Member, Academic, Teaching & Research

Cite this

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abstract = "We experimentally investigate if subjects in a tacit coordination situation with a conflict of interest tend to choose an equal compromise, even if it is strictly dominated. The data show that this is the case, as long as the compromise payoffs are not too low. Game comparisons suggest that choosing a dominated compromise is a focal point that allows subjects to avoid a costly coordination failure.",

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AB - We experimentally investigate if subjects in a tacit coordination situation with a conflict of interest tend to choose an equal compromise, even if it is strictly dominated. The data show that this is the case, as long as the compromise payoffs are not too low. Game comparisons suggest that choosing a dominated compromise is a focal point that allows subjects to avoid a costly coordination failure.

KW - Coordination

KW - equality

KW - efficiency

KW - focal point

KW - level-k model

KW - inequity aversion

U2 - 10.1016/j.socec.2015.11.004

DO - 10.1016/j.socec.2015.11.004

M3 - Article

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JO - Journal of Behavioral and Experimental Economics

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SN - 2214-8043

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The focality of dominated compromises in tacit coordination situations: Experimental evidence

Abstract

Keywords

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Anders Poulsen

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