Do we all coordinate in the long run?

Manja Gärtner (manja.gaertner@gmail.com), Robert Östling and Sebastian Tebbe (sebastian.tebbe@iies.su.se)
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Manja Gärtner: Competition and Consumers Department, German Institute for Economic Research (DIW Berlin)
Sebastian Tebbe: Stockholm University

Journal of the Economic Science Association, 2023, vol. 9, issue 1, No 3, 16-33

Abstract: Abstract Players often fail to coordinate on the efficient equilibrium in laboratory weak-link coordination games. In this paper, we investigate whether such coordination failures can be mitigated by increasing the number of rounds or altering per-period stakes. We find that neither time horizon nor stakes affect equilibrium selection. In contrast to previous findings, players are not more likely to play above the previous period’s minimum choice when the horizon is longer or per-period stakes lower. We also investigate which socio-demographic factors and behavioral traits correlate most strongly with play both in the first round and in subsequent rounds. Cognitive ability as measured by a cognitive reflection test stands out as the characteristic that is most strongly associated with efficient coordination.

Keywords: Coordination games; Weak-link games; Coordination failure; Strategic risk (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40881-022-00125-z

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