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Cognitive forward induction and coordination without common knowledge: An experimental study

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  • Blume, Andreas
  • Gneezy, Uri

Abstract

This paper investigates optimal play in coordination games in which cognition plays an important role. In our game logically omniscient players would be able to identify a distinct coordination opportunity from other obvious facts. Real players may be unable to make the required inference. Our main experimental results are that in a coordination task with a cognitive component (1) players play differently when playing against themselves rather than against another player, and (2) given the opportunity, players signal cognition by choosing the coordination task over an outside option, a phenomenon which we refer to as cognitive forward induction.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 68 (2010)
Issue (Month): 2 (March)
Pages: 488-511

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Handle: RePEc:eee:gamebe:v:68:y:2010:i:2:p:488-511

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Web page: http://www.elsevier.com/locate/inca/622836

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Citations

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Cited by:
  1. Uri Gneezy & Alex Imas & Kristóf Madarász, 2012. "Conscience Accounting: Emotional Dynamics and Social Behavior," STICERD - Theoretical Economics Paper Series /2012/563, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  2. Blume, A. & DeJong, D.V. & Maier, M., 2005. "Cognition in Spatial Dispersion Games," Discussion Paper 2005-58, Tilburg University, Center for Economic Research.
  3. Alós-Ferrer, Carlos & Kuzmics, Christoph, 2013. "Hidden symmetries and focal points," Journal of Economic Theory, Elsevier, vol. 148(1), pages 226-258.
  4. Martin Dufwenberg & Gunnar Köhlin & Peter Martinsson & Haileselassie Medhin, 2014. "Thanks but No Thanks: A New Policy to Reduce Land Conflict," CESifo Working Paper Series 4864, CESifo Group Munich.
  5. Andonie, Costel & Kuzmics, Christoph, 2012. "Pre-election polls as strategic coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 681-700.
  6. Andreas Blume & April Franco, 2002. "Learning from failure," Staff Report 299, Federal Reserve Bank of Minneapolis.
  7. Bosch-Domènech, Antoni & Vriend, Nicolaas J., 2013. "On the role of non-equilibrium focal points as coordination devices," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 52-67.
  8. John Duffy & Andreas Blume & April Franco, 2007. "Decentralized Organizational Learning: An Experimental Investigation," Working Papers 310, University of Pittsburgh, Department of Economics, revised Jul 2008.
  9. Kristóf Madarász & Uri Gneezy & Alex Imas, 2012. "Conscience accounting: emotional dynamics and social behaviour," LSE Research Online Documents on Economics 47994, London School of Economics and Political Science, LSE Library.
  10. Blume, A. & DeJong, D.V. & Maier, M., 2005. "Learning Strategic Sophistication," Discussion Paper 2005-59, Tilburg University, Center for Economic Research.
  11. Feinberg, Yossi, 2005. "Games with Incomplete Awareness," Research Papers 1894, Stanford University, Graduate School of Business.

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