When and Why? A Critical Survey on Coordination Failure in the Laboratory
44 Pages Posted: 15 Aug 2006 Last revised: 15 May 2008
Coordination games with Pareto-ranked equilibria have attracted major theoretical attention over the past two decades. Two early path-breaking sets of experimental studies were widely interpreted as suggesting that coordination failure is a common phenomenon in the laboratory. We identify the major determinants that seem to affect the incidence, and/or emergence, of coordination failure in the lab and review critically the existing experimental studies on coordination games with Pareto-ranked equilibria since that early evidence emerged. We conclude that coordination failure is likely to be the exception rather than the rule, both in the lab and outside of it.
Keywords: coordination games, Pareto-ranked equilibria, payoff-asymmetric equilibria, stag-hunt games, optimization incentives, robustness, coordination, coordination failure
JEL Classification: C72, C92
Suggested Citation: Suggested Citation