Failing to utilize potentially effective focal points: Prominence can stymie coordination on distinct actions

Uri Gneezy and Yuval Rottenstreich

Games and Economic Behavior, 2024, vol. 148, issue C, 68-81

Abstract: Are people skillful in utilizing potential focal points? We find a class of situations for which the answer is negative: the presence of prominent actions appears to stymie the use of distinct actions for coordination. Across several experimental games, we consistently observe that players readily coordinate on a categorically distinct action when all available actions are non-prominent but not when some actions are prominent. For instance, given the action set {Franklin Pierce, James Buchanan, Tianjin}, most players select the Chinese city Tianjin. Yet, given {Abraham Lincoln, George Washington, Tianjin}, they are roughly equally likely to select either American president and unlikely to select Tianjin, and given {Abraham Lincoln, George Washington, Shanghai}, their choices are distributed approximately uniformly. The observation that prominence stymies reliance on distinctiveness informs cognitive hierarchy and team reasoning theories of how people recognize focality.

Keywords: Coordination; Focal points; Level-k; Team reasoning (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:68-81

DOI: 10.1016/j.geb.2024.07.010

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