Coordination with Cognitive Noise

Salvatore Nunnari and Cary Frydman

No 16644, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We experimentally study how cognitive noise affects behavior in coordination games. When players face small computational errors in valuation, equilibrium play becomes more predictable owing to the disappearance of multiple equilibria. Our experimental data provide novel evidence for this prediction: the frequency of coordination depends systematically on (i) public information and (ii) the distribution from which public information is drawn. We estimate that cognitive noise constitutes roughly half of the observed noise in strategic behavior. The errors that we model are distinct from those in previous behavioral game theory models and give rise to novel predictions that our data support.

Keywords: Complexity; Context-Dependence; Stochastic Choice; Cognitive Imprecision (search for similar items in EconPapers)
JEL-codes: C72 C92 D91 E71 (search for similar items in EconPapers)
Date: 2021-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16644 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Coordination with Cognitive Noise (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16644

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16644

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().