Social Learning in Coordination Games: Does Status Matter?

Abstract

We report the results of experiments designed to test the impact of social status on learning in a coordination game. In the experiment, all subjects observe the play of an agent who either has high status or low status. In one treatment the agent is another player in the game; in the other the agent is a simulated player. Status is assigned within the experiment based on answers to a trivia quiz. The coordination game has two equilibria: one is payoff dominant but risky, and the other is risk-dominant. The latter is most commonly chosen in experiments where there is no coordination device.We find that a commonly observed agent enhances coordination on the payoff-dominant equilibrium more often when the agent has high status.

Keywords: Coordination Game, Payoff Dominance, Risk Dominance, Status

JEL Classification: C92, C7, Z13