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Compromise and coordination: An experimental study

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  • He, Simin
  • Wu, Jiabin

Abstract

This study experimentally examines the role of a compromise option in a repeated battle-of-the-sexes game. In a random matching environment, we find that compromise serves as an effective focal point and facilitates coordination, but fails to improve efficiency. However, in a fixed-partnership environment, compromise deters subjects from learning to play alternation, which is a more efficient, but arguably more complex strategy. As a result, compromise hurts efficiency by allowing subjects to coordinate on the less efficient outcome. In a follow-up experiment, we find that many compromisers switch to alternation after playing the repeated game multiple times. These results suggest that subjects teach and learn to use the alternation strategy from each other.

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  • He, Simin & Wu, Jiabin, 2020. "Compromise and coordination: An experimental study," Games and Economic Behavior, Elsevier, vol. 119(C), pages 216-233.
  • Handle: RePEc:eee:gamebe:v:119:y:2020:i:c:p:216-233
    DOI: 10.1016/j.geb.2019.11.003
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    3. Lensberg, Terje & Schenk-Hoppé, Klaus Reiner, 2021. "Cold play: Learning across bimatrix games," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 419-441.
    4. He, Simin & Wu, Jiabin & Zhang, Hanzhe, 2021. "Experimental and Noncooperative Analyses of Decentralized Matching with Transfers," Working Papers 2021-2, Michigan State University, Department of Economics.
    5. Lian Xue & Stefania Sitzia & Theodore L. Turocy, 2022. "Concord and contention in a dynamic unstructured bargaining experiment with costly conflict," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 22-02, School of Economics, University of East Anglia, Norwich, UK..
    6. Roberto Rozzi, 2021. "Competing Conventions with Costly Information Acquisition," Games, MDPI, vol. 12(3), pages 1-29, June.

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    More about this item

    Keywords

    Compromise; Battle-of-the-sexes; Repeated games; Behavioral game theory; Experimental economics;
    All these keywords.

    JEL classification:

    • 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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