The role of payoffs associated with partial coordination in laboratory coordination games

Abstract This paper presents experimental evidence on coordination games with two Pareto-rankable equilibria: one payoff-dominant and the other secure. Through experiments conducted with Indiana University undergraduates, I examine the effect of varying the dif-ference in payoffs between strategies in cases of partial coordination, in which some but not all of the other members of a given player’s group select the payoff-dominant strategy. I find that in repeated games players do not respond to changes in payoffs associated with partial coordination and consistently choose the payoff-dominant strategy. In one-shot games, how-ever, payoff dominance is less salient when payoffs associated with partial coordination favor the secure strategy than when payoffs associated with partial coordination are the same for each strategy. Acknowledgements This paper is based on research conducted as part of my honors thesis, which was performed in collaboration with Ricardo Lopez and James Walker, and I thank both for their invaluable contributions and guidance. I also thank Yung-Ro Yoon and Arlington Williams for helpful comments on earlier drafts and Jessica Simendinger for outstanding research assistance. ∗Any comments or suggestions are welcome. Contact the author a