Common and almost common knowledge of credible assignments in a coordination game

Ananish Chaudhuri (), Chenan Zhou (), Parapin Prak () and Laura Bangun ()
Additional contact information
Chenan Zhou: Department of Accounting and Finance, University of Auckland
Parapin Prak: Department of Economics, University of Auckland
Laura Bangun: Department of Economics, University of Auckland

Economics Bulletin, 2006, vol. 3, issue 1, 1-10

Abstract: We build on Van Huyck, Gillette and Battalio (1992) and examine the efficacy of credible assignments in a stag-hunt type coordination game with two Pareto-ranked equilibria, one payoff dominant and the other risk dominant. The majority of our subjects fail to coordinate to the payoff dominant outcome when no assignment is made. However, the majority of them always coordinate to the payoff dominant outcome when an assignment is made. This happens regardless of whether the assignment is “almost common knowledge” or “common knowledge”.

Keywords: Coordination (search for similar items in EconPapers)
JEL-codes: C7 C9 (search for similar items in EconPapers)
Date: 2006-01-06
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Citations: View citations in EconPapers (14)

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