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

Melanie Parravano and Odile Poulsen
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Melanie Parravano: University of East Anglia

No 14-07, Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) from School of Economics, University of East Anglia, Norwich, UK.

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.

Keywords: coordination; labels; focal point; stake size; payoff asymmetry (search for similar items in EconPapers)
JEL-codes: C70 C72 C92 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Stake size and the power of focal points in coordination games: Experimental evidence (2015)
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