Coordination games with asymmetric payoffs: An experimental study with intra-group communication

Jonas van Elten and Stefan P. Penczynski

Journal of Economic Behavior & Organization, 2020, vol. 169, issue C, 158-188

Abstract: Two alternative modes of reasoning in coordination games are prominently discussed in the literature: level-k thinking and team reasoning. In order to differentiate between the two modes of reasoning, we experimentally investigate payoff-asymmetric coordination games using an intra-group communication design that incentivizes subjects to explain the reasoning behind their decisions. We find that the reasoning process is significantly different between games. In payoff-symmetric games, team reasoning plays an important role for coordination. In payoff-asymmetric games, level-k reasoning results in frequent miscoordination. Our study clearly illustrates how small differences between strategic situations have a strong influence on reasoning.

Keywords: Coordination games; Asymmetric payoffs; Levels of reasoning; Team reasoning (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:169:y:2020:i:c:p:158-188

DOI: 10.1016/j.jebo.2019.11.006

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