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The power of sunspots: an experimental analysis

Dietmar Fehr, Frank Heinemann () and Aniol Llorente-Saguer ()

No 13-2, Working Papers from Federal Reserve Bank of Boston

Abstract: The authors show how the influence of extrinsic random signals depends on the noise structure of these signals. They present an experiment on a coordination game in which extrinsic random signals may generate sunspot equilibria. They measure how these signals affect behavior. Sunspot equilibria emerge naturally if there are salient public signals. Highly correlated private signals may also cause sunspot-driven behavior, even though this is no equilibrium. The higher the correlation of signals and the more easily these can be aggregated, the more powerful these signals are in moving actions way from the risk-dominant equilibrium.

Keywords: Human; behavior (search for similar items in EconPapers)
Date: 2013, Revised 2013
New Economics Papers: this item is included in nep-cbe and nep-exp
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Related works:
Journal Article: The power of sunspots: An experimental analysis (2019) Downloads
Working Paper: The Power of Sunspots: an Experimental Analysis (2017) Downloads
Working Paper: The Power of Sunspots: An Experimental Analysis (2011) Downloads
Working Paper: The Power of Sunspots: An Experimental Analysis (2011) Downloads
Working Paper: The Power of Sunspots: An Experimental Analysis (2011) Downloads
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