The focality of dominated compromises in tacit coordination situations: Experimental evidence

Zoë Bett, Anders Poulsen () and Odile Poulsen

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2016, vol. 60, issue C, 29-34

Abstract: We experimentally investigate if subjects in a tacit coordination situation with a conflict of interest tend to choose an equal compromise, even if it is strictly dominated. The data show that this is the case, as long as the compromise payoffs are not too low. Game comparisons suggest that choosing a dominated compromise is a focal point that allows subjects to avoid a costly coordination failure.

Keywords: Coordination; Equality; Efficiency; Focal point; Level-k model; Inequity aversion (search for similar items in EconPapers)
JEL-codes: C70 C72 C92 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:60:y:2016:i:c:p:29-34

DOI: 10.1016/j.socec.2015.11.004

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