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Stake size and the power of focal points in coordination games: Experimental evidence

Lookup NU author(s): Dr Melanie Parravano Baro

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Abstract

We collect data from symmetric and asymmetric coordination games with a focal point and vary the stake size. The data show that in symmetric games coordination on the label-salient strategy increases with stake size. By contrast, in asymmetric games the coordination rates do not vary with stake size and are close to the levels predicted by both the mixed Nash equilibrium and the level-k model used by Crawford et al. (2008). These findings suggest that players' mode of reasoning, and the extent to which it can be explained by team reasoning or a level-k model, crucially depends on the symmetry or asymmetry of the coordination payoffs.

Publication metadata

Author(s): Parravano M, Poulsen O

Publication type: Article

Publication status: Published

Journal: Games and Economic Behavior

Year: 2015

Volume: 94

Pages: 191-199

Print publication date: 01/11/2015

Online publication date: 08/05/2015

Acceptance date: 05/05/2015

Date deposited: 08/02/2016

ISSN (electronic): 0899-8256

Publisher: Elsevier

URL: http://dx.doi.org/10.1016/j.geb.2015.05.001

DOI: 10.1016/j.geb.2015.05.001

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