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An Experimental Study Of Uncertainty In Coordination Games

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  • Christos A. Ioannou
  • Miltiadis Makris

Abstract

Global games and Poisson games have been proposed to address equilibrium indeterminacy in Common Knowledge Coordination games. The present study investigates in a controlled setup, using as controls Common Knowledge games, whether idiosyncratic uncertainty about economic fundamentals (Global games) or uncertainty about the number of actual players (Poisson games) may influence subjects' behavior. We find that uncertainty about the number of actual players has more influence on subjects' behavior than idiosyncratic uncertainty about economic fundamentals. Furthermore, subjects' behavior under Poisson population‐size uncertainty is closer to the respective theoretical prediction than subjects' behavior under idiosyncratic uncertainty about economic fundamentals.

Suggested Citation

  • Christos A. Ioannou & Miltiadis Makris, 2019. "An Experimental Study Of Uncertainty In Coordination Games," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(2), pages 751-799, May.
    • Handle: RePEc:wly:iecrev:v:60:y:2019:i:2:p:751-799
    DOI: 10.1111/iere.12367
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