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Overcoming coordination failure in games with focal points

Author

Listed:
  • David Rojo Arjona
  • Stefania Sitzia
  • Jiwei Zheng
Abstract
Focal points (Schelling, 1960) have shown limitations as coordination devices in games with conflict, such as the battle of the sexes games. We experimentally test whether an increase in their salience can counteract the negative impact of conflict on coordination. The intuition is that, in the presence of conflict, the solution to the coordination dilemma offered by the focal point loses importance. Increasing its salience increases its relevance and therefore coordination success. Our results provide strong support for this conjecture. Furthermore, when games feature outcomes with different degrees of payoffs’ inequality (i.e. the difference of players’ payoffs) and efficiency (i.e. the sum of players’ payoffs), increasing salience does not lead to an obvious increase in coordination, unless the salience of the focal point is maximal.

Suggested Citation

  • David Rojo Arjona & Stefania Sitzia & Jiwei Zheng, 2021. "Overcoming coordination failure in games with focal points," Working Papers 335109305, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:335109305
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    References listed on IDEAS

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    1. Dong, Zhiqiang & Zhang, Yanren, 2022. "Tournaments as coordination devices: Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).

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    More about this item

    Keywords

    coordination games; focal points; salience; conflict of interests; battle-of-the-sexes; intermixed-blocked effect;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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