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Coordination games with asymmetric payoffs: An experimental study with intra-group communication

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  • Elten, Jonas van
  • Penczynski, Stefan P.

Abstract

Two alternative modes of reasoning in coordination games are prominently discussed in the literature: level-k thinking and team reasoning. In order to differentiate between the two modes of reasoning, we experimentally investigate payoff-asymmetric coordination games using an intra-group communication design that incentivizes subjects to explain the reasoning behind their decisions. We find that the reasoning process is significantly different between games. In payoff-symmetric games, team reasoning plays an important role for coordination. In payoff-asymmetric games, level-k reasoning results in frequent miscoordination. Our study clearly illustrates how small differences between strategic situations have a strong influence on reasoning.

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  • Elten, Jonas van & Penczynski, Stefan P., 2020. "Coordination games with asymmetric payoffs: An experimental study with intra-group communication," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 158-188.
    • Handle: RePEc:eee:jeborg:v:169:y:2020:i:c:p:158-188
    DOI: 10.1016/j.jebo.2019.11.006
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    More about this item

    Keywords

    Coordination games; Asymmetric payoffs; Levels of reasoning; Team reasoning;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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