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Do Players’ Beliefs or Risk Attitudes Determine The Equilibrium Selections in 2x2 Coordination Games?


  • Thomas Neumann

    () (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Bodo Vogt

    () (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)


This study focuses on the question whether it is risk aversion or the beliefs of players that explains the strategic choices in 2x2 coordination games. In a laboratory experiment, we elicit the risk attitudes by using lottery choices. Furthermore, using a quadratic scoring rule, subjects’ beliefs about the choice of the opponent are elicited directly. Our data show that participants’ behavior is not explained by risk attitude, but rather is explained as their best response to their stated first order beliefs.

Suggested Citation

  • Thomas Neumann & Bodo Vogt, 2009. "Do Players’ Beliefs or Risk Attitudes Determine The Equilibrium Selections in 2x2 Coordination Games?," FEMM Working Papers 09024, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  • Handle: RePEc:mag:wpaper:09024

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    References listed on IDEAS

    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, January.
    2. Carlsson, Hans & van Damme, Eric, 1993. "Global Games and Equilibrium Selection," Econometrica, Econometric Society, vol. 61(5), pages 989-1018, September.
    3. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-248, March.
    4. Keser, Claudia & Ehrhart, Karl-Martin & Berninghaus, Siegfried K., 1998. "Coordination and local interaction: experimental evidence," Economics Letters, Elsevier, vol. 58(3), pages 269-275, March.
    5. Miguel A. Costa-Gomes & Georg Weizsäcker, 2008. "Stated Beliefs and Play in Normal-Form Games," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 729-762.
    6. Harsanyi John C., 1995. "A New Theory of Equilibrium Selection for Games with Incomplete Information," Games and Economic Behavior, Elsevier, vol. 10(2), pages 318-332, August.
    7. Schmidt, David & Shupp, Robert & Walker, James M. & Ostrom, Elinor, 2003. "Playing safe in coordination games:: the roles of risk dominance, payoff dominance, and history of play," Games and Economic Behavior, Elsevier, vol. 42(2), pages 281-299, February.
    8. Antonio Cabrales & Rosemarie Nagel & Roc Armenter, 2007. "Equilibrium selection through incomplete information in coordination games: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 10(3), pages 221-234, September.
    9. Cooper, Russell & De Jong, Douglas V. & Forsythe, Robert & Ross, Thomas W., 1992. "Forward induction in coordination games," Economics Letters, Elsevier, vol. 40(2), pages 167-172, October.
    10. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    12. Yaw Nyarko & Andrew Schotter, 2002. "An Experimental Study of Belief Learning Using Elicited Beliefs," Econometrica, Econometric Society, vol. 70(3), pages 971-1005, May.
    13. Goeree, Jacob K. & Holt, Charles A. & Palfrey, Thomas R., 2003. "Risk averse behavior in generalized matching pennies games," Games and Economic Behavior, Elsevier, vol. 45(1), pages 97-113, October.
    14. repec:kap:expeco:v:1:y:1998:i:1:p:43-62 is not listed on IDEAS
    15. Selten, Reinhard, 1995. "An axiomatic theory of a risk dominance measure for bipolar games with linear incentives," Games and Economic Behavior, Elsevier, vol. 8(1), pages 213-263.
    16. Reinhard Selten, 1998. "Axiomatic Characterization of the Quadratic Scoring Rule," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 43-61, June.
    17. Frank Heinemann & Rosemarie Nagel & Peter Ockenfels, 2004. "The Theory of Global Games on Test: Experimental Analysis of Coordination Games with Public and Private Information," Econometrica, Econometric Society, vol. 72(5), pages 1583-1599, September.
    18. Keser, Claudia & Vogt, Bodo, 2000. "Why do experimental subjects choose an equilibrium which is neither risk nor payoff dominant," Papers 00-40, Sonderforschungsbreich 504.
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    Cited by:

    1. Berninghaus, Siegfried K. & Haller, Sven & Krüger, Tyll & Neumann, Thomas & Schosser, Stephan & Vogt, Bodo, 2013. "Risk attitude, beliefs, and information in a Corruption Game – An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 46-60.
    2. Büyükboyacı, Mürüvvet, 2014. "Risk attitudes and the stag-hunt game," Economics Letters, Elsevier, vol. 124(3), pages 323-325.
    3. Bosworth, Steven J., 2013. "Social capital and equilibrium selection in Stag Hunt games," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 11-20.

    More about this item


    experimental economics; coordination games; equilibrium selection; first order beliefs;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games


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