Measuring Strategic Uncertainty in Coordination Games

Heinemann, Frank; Nagel, Rosemarie und Ockenfels, Peter (Mai 2004): Measuring Strategic Uncertainty in Coordination Games. SFB/TR 15 Discussion Paper No. 6

Abstract

Lecture on the first SFB/TR 15 meeting, Gummersbach, July, 18 - 20, 2004This paper explores predictability of behavior in coordination games with multiple equilibria. In a laboratory experiment we measure subjects' certainty equivalents for three coordination games and one lottery. Attitudes towards strategic uncertainty in coordination games are related to risk aversion, experience seeking, gender and age. From the distribution of certainty equivalents among participating students we estimate probabilities for successful coordination in a wide range of coordination games. For many games success of coordination is predictable with a reasonable error rate. The best response of a risk neutral player is close to the global-game solution. Comparing choices in coordination games with revealed risk aversion, we estimate subjective probabilities for successful coordination. In games with a low coordination requirement, most subjects underestimate the probability of success. In games with a high coordination requirement, most subjects overestimate this probability. Data indicate that subjects have probabilistic beliefs about success or failure of coordination rather than beliefs about individual behavior of other players.

• Dokumententyp: Paper
• Fakultät: Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems ; Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > C3 - Innovationen in Informationstechnologien und Regulierung von Finanzmärkten
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• JEL Classification: C72, C91, D81, D84
• Sprache: Englisch