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Coordination in 2 x 2 Games by Following Recommendations from Correlated Equilibria

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  • Johne Bone
  • Michalis Drouvelis
  • Indrajit Ray

Abstract

We consider three games, Symmetric Battle of the Sexes, Modified Battle of the Sexes and Chicken and two different correlation devices, public and private, with the same expected payoffs in equilibrium, which is also the best correlated equilibrium payoff for these games. Despite our choices of the payoffs in these games based on some theoretical criteria, we find that coordination and following recommendations vary significantly among our treatments. We explain these differences by analysing players' choices in cases when they do and do not follow recommendations in different games.

Suggested Citation

  • Johne Bone & Michalis Drouvelis & Indrajit Ray, 2013. "Coordination in 2 x 2 Games by Following Recommendations from Correlated Equilibria," Discussion Papers 12-04, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:12-04
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    Citations

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    Cited by:

    1. Siebert, Jan & Yang, Guanzhong, 2017. "Discoordination and miscoordination caused by sunspots in the laboratory," Working Papers on East Asian Studies 114/2017, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    2. Ozdogan, Ayca & Saglam, Ismail, 2020. "Correlated Equilibrium Under Costly Disobedience," MPRA Paper 99370, University Library of Munich, Germany.
    3. Indrajit Ray & Sonali Gupta, 2013. "Coarse correlated equilibria in linear duopoly games," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 541-562, May.
    4. Konstantinos Georgalos & Indrajit Ray & Sonali SenGupta, 2020. "Nash versus coarse correlation," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1178-1204, December.
    5. Karakostas, Alexandros & Zizzo, Daniel John, 2016. "Compliance and the power of authority," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 67-80.
    6. Antonio Cabrales & Michalis Drouvelis & Zeynep Gurguy & Indrajit Ray, 2017. "Transparency is Overrated: Communicating in a Coordination Game with Private Information," CESifo Working Paper Series 6781, CESifo.
    7. Cabrales, Antonio & Drouvelis, Michalis & Gurguc, Zeynep & Ray, Indrajit, 2018. "Do we need to listen to all stakeholders?: communicating in a coordination game with private information," Cardiff Economics Working Papers E2018/23, Cardiff University, Cardiff Business School, Economics Section.
    8. Friedman, Dan & Rabanal, Jean Paul & Rud, Olga A & Zhao, Shuchen, 2021. "On the empirical relevance of correlated equilibrium," UiS Working Papers in Economics and Finance 2021/2, University of Stavanger.
    9. Konstantinos Georgalos & Indrajit Ray & Sonali Sen Gupta, 2017. "Coarse correlation and coordination in a game," Working Papers 151235570, Lancaster University Management School, Economics Department.
    10. Indrajit Ray & Sonali Gupta, 2013. "Coarse correlated equilibria in linear duopoly games," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 541-562, May.
    11. Siebert, Jan & Yang, Guanzhong, 2021. "Coordination problems triggered by sunspots in the laboratory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 94(C).
    12. Alejandro Lee-Penagos, 2016. "Learning to Coordinate: Co-Evolution and Correlated Equilibrium," Discussion Papers 2016-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    13. Siebert, Jan & Yang, Guanzhong, 2020. "Coordination problems triggered by sunspots in the laboratory," Ruhr Economic Papers 848, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    14. Arifovic, Jasmina & Boitnott, Joshua F. & Duffy, John, 2019. "Learning correlated equilibria: An evolutionary approach," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 171-190.
    15. Arifovic, Jasmina & Jiang, Janet Hua, 2019. "Strategic uncertainty and the power of extrinsic signals– evidence from an experimental study of bank runs," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 1-17.
    16. Georgalos, Konstantinos & Ray, Indrajit & Gupta, Sonali Sen, 2019. "Nash vs. Coarse Correlation," Cardiff Economics Working Papers E2019/3, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    Keywords

    Coordination; Public message; Recommendation; Correlated equilibrium;
    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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