What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis

Nicolas Jacquemet () and Adam Zylbersztejn ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Experiments based on the Beard and Beil (1994) two-player coordination game robustly show that coordination failures arise as a result of two puzzling behaviors: (i) subjects are not willing to rely on others' self-interested maximization, and (ii) self-interested maximization is not ubiquitous. Such behavior is often considered to challenge the relevance of subgame perfectness as an equilibrium selection criterion, since weakly dominated strategies are actually used. We report on new experiments investigating whether inequality in payoffs between players, maintained in most lab implementations of this game, drives such behavior. Our data clearly show that the failure to maximize personal payoffs, as well as the fear that others might act this way, do not stem from inequality aversion. This result is robust to varying the saliency of decisions, repetition-based learning and cultural differences between France and Poland.

Keywords: Coordination Failure; Subgame perfectness; Non-credible threats; Laboratory experiments; Social Preferences; Inequality Aversion (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01026080v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Published in Review of Economic Design, 2014, 18 (4), pp.243-264. ⟨10.1007/s10058-014-0162-5⟩

Downloads: (external link)
https://shs.hal.science/halshs-01026080v1/document (application/pdf)

Related works:
Journal Article: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2014)
Working Paper: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2014)
Working Paper: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2014)
Working Paper: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2011)
Working Paper: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2011)
Working Paper: What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-01026080

DOI: 10.1007/s10058-014-0162-5

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().