6533b7d3fe1ef96bd1260bb4

RESEARCH PRODUCT

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

Stefan P. PenczynskiJonas Van Elten

subject

Communication designOrganizational Behavior and Human Resource ManagementEconomics and EconometricsProcess (engineering)Computer scienceOrder (business)Human–computer interaction0502 economics and business05 social sciencesCommunication in small groups050206 economic theoryCoordination game050207 economics

description

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.

https://doi.org/10.1016/j.jebo.2019.11.006