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

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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.

Details

Original languageEnglish
Pages (from-to)158-188
Number of pages31
JournalJournal of Economic Behavior & Organization
Volume169
Early online date30 Nov 2019
DOIs
Publication statusPublished - Jan 2020
Peer-reviewedYes

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ID: 170065422

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