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Coordination when there are restricted and unrestricted options

Author

Listed:
  • Shaun P. Hargreaves Heap

    (King’s College, The Strand)

  • David Rojo Arjona

    (Leicester University)

  • Robert Sugden

    (University of East Anglia)

Abstract

One might expect that, in pure coordination games, coordination would become less frequent as the number of options increases. Contrary to this expectation, we report an experiment which found more frequent coordination when the option set was unrestricted than when it was restricted. To try to explain this result, we develop a method for eliciting the general rules that subjects use to identify salient options in restricted and unrestricted sets. We find that each such rule, if used by all subjects, would generate greater coordination in restricted sets. However, subjects tend to apply different rules to restricted and unrestricted sets.

Suggested Citation

  • Shaun P. Hargreaves Heap & David Rojo Arjona & Robert Sugden, 2017. "Coordination when there are restricted and unrestricted options," Theory and Decision, Springer, vol. 83(1), pages 107-129, June.
    • Handle: RePEc:kap:theord:v:83:y:2017:i:1:d:10.1007_s11238-017-9589-9
    DOI: 10.1007/s11238-017-9589-9
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    References listed on IDEAS

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    1. Vincent P. Crawford & Uri Gneezy & Yuval Rottenstreich, 2008. "The Power of Focal Points Is Limited: Even Minute Payoff Asymmetry May Yield Large Coordination Failures," American Economic Review, American Economic Association, vol. 98(4), pages 1443-1458, September.
    2. Nicholas Bardsley & Judith Mehta & Chris Starmer & Robert Sugden, 2010. "Explaining Focal Points: Cognitive Hierarchy Theory "versus" Team Reasoning," Economic Journal, Royal Economic Society, vol. 120(543), pages 40-79, March.
    3. Mehta, Judith & Starmer, Chris & Sugden, Robert, 1994. "The Nature of Salience: An Experimental Investigation of Pure Coordination Games," American Economic Review, American Economic Association, vol. 84(3), pages 658-673, June.
    4. Isoni, Andrea & Poulsen, Anders & Sugden, Robert & Tsutsui, Kei, 2013. "Focal points in tacit bargaining problems: Experimental evidence," European Economic Review, Elsevier, vol. 59(C), pages 167-188.
    5. Bacharach, Michael & Bernasconi, Michele, 1997. "The Variable Frame Theory of Focal Points: An Experimental Study," Games and Economic Behavior, Elsevier, vol. 19(1), pages 1-45, April.
    6. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-550, May.
    7. Nicholas Bardsley, 2000. "Control Without Deception: Individual Behaviour in Free-Riding Experiments Revisited," Experimental Economics, Springer;Economic Science Association, vol. 3(3), pages 215-240, December.
    8. Michael Bacharach, 2006. "The Hi-Lo Paradox, from Beyond Individual Choice: Teams and Frames in Game Theory," Introductory Chapters, in: Natalie Gold & Robert Sugden (ed.),Beyond Individual Choice: Teams and Frames in Game Theory, Princeton University Press.
    9. Vincent P. Crawford & Nagore Iriberri, 2007. "Fatal Attraction: Salience, Naïveté, and Sophistication in Experimental "Hide-and-Seek" Games," American Economic Review, American Economic Association, vol. 97(5), pages 1731-1750, December.
    10. Nicholas Bardsley, 2000. "Control without Deception," Tinbergen Institute Discussion Papers 00-107/1, Tinbergen Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Swee-Hoon Chuah & Robert Hoffmann & Jeremy Larner, 2019. "Is knowledge curse or blessing in pure coordination problems?," Theory and Decision, Springer, vol. 87(1), pages 123-146, July.
    2. Rojo Arjona, David & Sitzia, Stefania & Zheng, Jiwei, 2022. "Overcoming coordination failure in games with focal points: An experimental investigation," Games and Economic Behavior, Elsevier, vol. 136(C), pages 505-523.
    3. Alessandro Sontuoso & Sudeep Bhatia, 2021. "A notion of prominence for games with natural‐language labels," Quantitative Economics, Econometric Society, vol. 12(1), pages 283-312, January.
    4. Gächter, Simon & Starmer, Chris & Thöni, Christian & Tufano, Fabio & Weber, Till O., 2022. "Social closeness can help, harm and be irrelevant in solving pure coordination problems," Economics Letters, Elsevier, vol. 216(C).

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    More about this item

    Keywords

    Coordination; Salience; Focal points; Odd-one-out; Typicality; Prototypicality;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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