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Culture-Dependent Strategies in Coordination Games

35 Pages Posted: 18 Jan 2014 Last revised: 13 Apr 2014

Matthew O. Jackson

Stanford University - Department of Economics; Santa Fe Institute; Canadian Institute for Advanced Research (CIFAR)

Yiqing Xing

Johns Hopkins University - Carey Business School

Date Written: April 2014

Abstract

We examine different populations' play in coordination games in online experiments with over a thousand subjects. Subjects played a two-player coordination game that had multiple equilibria: two equilibria with highly asymmetric payoffs and another equilibrium with symmetric payoffs but a slightly lower total payoff. Subjects were predominantly from India and the United States.

Subjects residing in India played the strategies leading to asymmetric payoffs significantly more frequently than subjects residing in the U.S. who showed a greater play of the strategy leading to the symmetric payoffs. In addition, when prompted to play asymmetrically, the population from India responded even more significantly than those from the U.S. Overall, subjects' predictions of how others would play were more accurate when the other player was from their own populations, and they coordinated significantly more frequently and earned significantly higher payoffs when matched with other subjects from their own population than when matched across populations.

Keywords: Homophily, Coordination, Culture, Convention, Social networks

JEL Classification: D85, C72, A14

Suggested Citation

Jackson, Matthew O. and Xing, Yiqing, Culture-Dependent Strategies in Coordination Games (April 2014). Available at SSRN: https://ssrn.com/abstract=2380449 or http://dx.doi.org/10.2139/ssrn.2380449

Matthew O. Jackson (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
1-650-723-3544 (Phone)

HOME PAGE: http://www.stanford.edu/~jacksonm

Santa Fe Institute

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Canadian Institute for Advanced Research (CIFAR) ( email )

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

Yiqing Xing

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

HOME PAGE: http://yiqingxing.com

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