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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. Bosch-Domènech, Antoni & Vriend, Nicolaas J., 2013. "On the role of non-equilibrium focal points as coordination devices," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 94(C), pages 52-67.
  2. Feinberg, Yossi, 2005. "Games with Incomplete Awareness," Research Papers 1894, Stanford University, Graduate School of Business.
  3. Andreas Blume & John Duffy & April Mitchell Franco, 2008. "Decentralized Organizational Learning: An Experimental Investigation," Working Papers, University of Pittsburgh, Department of Economics 382, University of Pittsburgh, Department of Economics, revised May 2009.
  4. Blume, A. & DeJong, D.V. & Maier, M., 2005. "Cognition in Spatial Dispersion Games," Discussion Paper, Tilburg University, Center for Economic Research 2005-58, Tilburg University, Center for Economic Research.
  5. Alós-Ferrer, Carlos & Kuzmics, Christoph, 2013. "Hidden symmetries and focal points," Journal of Economic Theory, Elsevier, Elsevier, vol. 148(1), pages 226-258.
  6. Martin Dufwenberg & Gunnar Köhlin & Peter Martinsson & Haileselassie Medhin, 2014. "Thanks but No Thanks: A New Policy to Reduce Land Conflict," Working Papers 519, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Andonie, Costel & Kuzmics, Christoph, 2012. "Pre-election polls as strategic coordination devices," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 84(2), pages 681-700.
  8. Blume, A. & DeJong, D.V. & Maier, M., 2005. "Learning Strategic Sophistication," Discussion Paper, Tilburg University, Center for Economic Research 2005-59, Tilburg University, Center for Economic Research.
  9. Kristóf Madarász & Uri Gneezy & Alex Imas, 2012. "Conscience accounting: emotional dynamics and social behaviour," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 47994, London School of Economics and Political Science, LSE Library.
  10. Andreas Blume & April Franco, 2002. "Learning from failure," Staff Report, Federal Reserve Bank of Minneapolis 299, Federal Reserve Bank of Minneapolis.
  11. Uri Gneezy & Alex Imas & Kristóf Madarász, 2012. "Conscience Accounting: Emotional Dynamics and Social Behavior," STICERD - Theoretical Economics Paper Series, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE /2012/563, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

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