On the role of non-equilibrium focal points as coordination devices

Antoni Bosch-Domènech and Nicolaas Vriend

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Considering a pure coordination game with a large number of equivalent equilibria, we argue, first, that a focal point that is itself not a Nash equilibrium and is Pareto dominated by all Nash equilibria, may attract the players' choices. Second, we argue that such a non-equilibrium focal point may act as an equilibrium selection device that the players use to coordinate on a closely related small subset of Nash equilibria. We present theoretical as well as experimental support for these two new roles of focal points as coordination devices.

Keywords: Coordination game; Focal point; Nash equilibrium; Equilibrium selection; Coordination device; LeeX (search for similar items in EconPapers)
JEL-codes: C72 C91 (search for similar items in EconPapers)
Date: 2008-02
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: On the role of non-equilibrium focal points as coordination devices (2013)
Working Paper: On the Role of Non-equilibrium Focal Points as Coordination Devices (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1064

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