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The focality of dominated compromises in tacit coordination situations: Experimental evidence

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  • Bett, Zoë
  • Poulsen, Anders
  • Poulsen, Odile

Abstract

We experimentally investigate if subjects in a tacit coordination situation with a conflict of interest tend to choose an equal compromise, even if it is strictly dominated. The data show that this is the case, as long as the compromise payoffs are not too low. Game comparisons suggest that choosing a dominated compromise is a focal point that allows subjects to avoid a costly coordination failure.

Suggested Citation

  • Bett, Zoë & Poulsen, Anders & Poulsen, Odile, 2016. "The focality of dominated compromises in tacit coordination situations: Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 60(C), pages 29-34.
    • Handle: RePEc:eee:soceco:v:60:y:2016:i:c:p:29-34
    DOI: 10.1016/j.socec.2015.11.004
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    Cited by:

    1. Poulsen, Odile & Saral, Krista J., 2018. "Coordination and focality under gain–loss framing: Experimental evidence," Economics Letters, Elsevier, vol. 164(C), pages 75-78.
    2. He, Simin & Wu, Jiabin, 2020. "Compromise and coordination: An experimental study," Games and Economic Behavior, Elsevier, vol. 119(C), pages 216-233.
    3. Andrea Martinangeli & Peter Martinsson & Amrish Patel, 2017. "Coordination via redistribution," University of East Anglia School of Economics Working Paper Series 2017-07, School of Economics, University of East Anglia, Norwich, UK..
    4. Anders Poulsen & Axel Sonntag, 2019. "Focality is Intuitive - Experimental Evidence on the Effects of Time Pressure in Coordination Games," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 19-01, School of Economics, University of East Anglia, Norwich, UK..
    5. Faillo, Marco & Smerilli, Alessandra & Sugden, Robert, 2017. "Bounded best-response and collective-optimality reasoning in coordination games," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 317-335.

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    More about this item

    Keywords

    Coordination; Equality; Efficiency; Focal point; Level-k model; Inequity aversion;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • 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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