Journal article
Selection Criteria in Coordination Games: Some Experimental Results
The American economic review, Vol.80(1), pp.218-233
03/01/1990
Abstract
Using an experimental design, a class of symmetric, simultaneous move, complete information games called coordination games was studied. Such games exhibit multiple Nash equilibria that are Pareto-rankable. The experimental evidence strongly supports the hypothesis that the outcome will be from the set of Nash equilibria. However, the Pareto-dominant equilibrium was not always selected in the games. Evidence was found that variations in payoffs from a rival's play of a dominated strategy can influence equilibrium selection. As a result, the hypotheses based on Pareto dominance and the irrelevance of dominated strategies are rejected. A class of tacit pure coordination games with multiple equilibria that are strictly Pareto-ranked was investigated. Seven experiments were carried out that provide evidence on how human subjects make decisions under conditions of uncertainty. The experiments provide an example of coordination failure. This inefficient outcome is the result of strategic uncertainty: some subjects concluded that it was too risky to choose the payoff-dominant action, and most subjects focused on outcomes in earlier period games.
Details
- Title: Subtitle
- Selection Criteria in Coordination Games: Some Experimental Results
- Creators
- Russell W. CooperDouglas V. DeJongRobert ForsytheThomas W. Ross
- Resource Type
- Journal article
- Publication Details
- The American economic review, Vol.80(1), pp.218-233
- ISSN
- 0002-8282
- Publisher
- American Economic Association
- Number of pages
- 16
- Language
- English
- Date published
- 03/01/1990
- Academic Unit
- Economics; Accounting
- Record Identifier
- 9984963128302771
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