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Stake size and the power of focal points in coordination games: Experimental evidence

Author

Listed:
  • Melanie Parravano

    (University of East Anglia)

  • Odile Poulsen

    (University of East Anglia)

Abstract

We collect data from symmetric and asymmetric coordination games with a focal point and vary the stake size. The data show that in symmetric games coordination on the label-salient strategy increases with stake size. By contrast, in asymmetric games the coordination rates do not vary with stake size and are close to the levels predicted by both the mixed Nash equilibrium and the level-k model used by Crawford, Gneezy, and Rottenstreich (2008). These findings suggest that players’ mode of reasoning, and the extent to which it can be explained by team reasoning or a level-k model, crucially depends on the symmetry or asymmetry of the coordination payoffs.

Suggested Citation

  • Melanie Parravano & Odile Poulsen, 2014. "Stake size and the power of focal points in coordination games: Experimental evidence," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 14-07, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:wcbess:14-07
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    References listed on IDEAS

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    1. repec:eee:gamebe:v:114:y:2019:i:c:p:193-214 is not listed on IDEAS
    2. repec:eee:ecolet:v:164:y:2018:i:c:p:75-78 is not listed on IDEAS
    3. Mamadou Gueye & Nicolas Querou & Raphaël Soubeyran, 2018. "Does equity induce inefficiency? An experiment on coordination," Working Papers hal-01947414, HAL.
    4. repec:eee:eecrev:v:108:y:2018:i:c:p:172-190 is not listed on IDEAS
    5. Mamadou Gueye & Nicolas Querou & Raphaël Soubeyran, 2018. "Does equity induce inefficiency? An experiment on coordination," CEE-M Working Papers hal-01947414, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    6. Thomas Demuynck & Christian Seel & Giang Tran, 2019. "Measuring Competitiveness and Cooperativeness," Working Papers ECARES 2019-12, ULB -- Universite Libre de Bruxelles.
    7. Sonntag, Axel & Poulsen, Anders, 2019. "Focality is intuitive - Experimental evidence on the effects of time pressure in coordination games," MPRA Paper 92262, University Library of Munich, Germany.
    8. Philipp Denter & John Morgan & Dana (D.) Sisak, 2018. "Showing Off or Laying Low? The Economics of Psych-outs," Tinbergen Institute Discussion Papers 18-041/VII, Tinbergen Institute.
    9. Gisèle Umbhauer, 2019. "Traveler’s dilemma : how the value of the luggage influences behavior," Working Papers of BETA 2019-13, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    10. James C. Cox & Vjollca Sadiraj, 2018. "Incentives," Experimental Economics Center Working Paper Series 2018-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    11. Stefania Sitzia & Jiwei Zheng, 2018. "Group behaviour in tacit coordination games with focal points: An experimental investigation," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-02R, School of Economics, University of East Anglia, Norwich, UK..
    12. Anders Poulsen & Axel Sonntag, 2019. "Focality is Intuitive - Experimental Evidence on the Effects of Time Pressure in Coordination Games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 19-01, School of Economics, University of East Anglia, Norwich, UK..
    13. Mamadou Gueye & Nicolas Querou & Raphaël Soubeyran, 2018. "Does equity induce inefficiency? An experiment on coordination," Working Papers hal-01947414, HAL.

    More about this item

    Keywords

    coordination; labels; focal point; stake size; payoff asymmetry;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • 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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