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Coordination and focality under gain–loss framing: Experimental evidence

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  • Poulsen, Odile
  • Saral, Krista J.

Abstract

Are people better at coordinating on a focal point when the game is framed as coordinating on a division of losses rather than gains? In an experimental coordination game, we vary the payoff framing (gain vs loss) and stake size (low vs high) to examine this question. We find that loss framing reduces coordination on the focal point, with the strongest effect observed in high stakes games.

Suggested Citation

  • Poulsen, Odile & Saral, Krista J., 2018. "Coordination and focality under gain–loss framing: Experimental evidence," Economics Letters, Elsevier, vol. 164(C), pages 75-78.
    • Handle: RePEc:eee:ecolet:v:164:y:2018:i:c:p:75-78
    DOI: 10.1016/j.econlet.2018.01.006
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    More about this item

    Keywords

    Coordination games; Focal point; Framing; Losses versus gains;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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