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Overcoming coordination failure in games with focal points

David Rojo Arjona, Stefania Sitzia and Jiwei Zheng

No 335109305, Working Papers from Lancaster University Management School, Economics Department

Abstract: Focal points (Schelling, 1960) have shown limitations as coordination devices in games with conflict, such as the battle of the sexes games. We experimentally test whether an increase in their salience can counteract the negative impact of conflict on coordination. The intuition is that, in the presence of conflict, the solution to the coordination dilemma offered by the focal point loses importance. Increasing its salience increases its relevance and therefore coordination success. Our results provide strong support for this conjecture. Furthermore, when games feature outcomes with different degrees of payoffs’ inequality (i.e. the difference of players’ payoffs) and efficiency (i.e. the sum of players’ payoffs), increasing salience does not lead to an obvious increase in coordination, unless the salience of the focal point is maximal.

Keywords: coordination games; focal points; salience; conflict of interests; battle-of-the-sexes; intermixed-blocked effect (search for similar items in EconPapers)
JEL-codes: C72 C78 C91 D91 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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