Identifying the Reasons for Coordination Failure in a Laboratory Experiment

22 Pages Posted: 25 Sep 2016 Last revised: 29 Sep 2022

See all articles by Philipp Külpmann

Philipp Külpmann

University of Vienna - Vienna Center for Experimental Economics

Davit Khantadze

University of Warwick

Date Written: September 27, 2022

Abstract

We investigate the effect of the absence of common knowledge on the outcomes of coordination games in a laboratory experiment. Using cognitive types, we can explain coordination failure in pure coordination games while differentiating between coordination failure due to first- and higher-order beliefs.
In our experiment, around $76\%$ of the players chose the payoff-dominant equilibrium strategy despite the absence of common knowledge. However, $9.33 \%$ of the players had first-order beliefs that led to coordination failure, and another $9.33 \%$ exhibited coordination failure due to higher-order beliefs.

Keywords: Higher-order beliefs, coordination failure, cognitive abilities, experimental economics, game theory

JEL Classification: C72, C92, D83

Suggested Citation

Külpmann, Philipp and Khantadze, Davit, Identifying the Reasons for Coordination Failure in a Laboratory Experiment (September 27, 2022). Center for Mathematical Economics Working Paper No. 567, Available at SSRN: https://ssrn.com/abstract=2842585 or http://dx.doi.org/10.2139/ssrn.2842585

Philipp Külpmann (Contact Author)

University of Vienna - Vienna Center for Experimental Economics ( email )

Oskar-Morgenstern-Platz 1
Vienna, Vienna 1090
Austria

Davit Khantadze

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
116
Abstract Views
1,182
Rank
425,231
PlumX Metrics