Learning and sophistication in coordination games

This paper studies the role of strategic teaching in coordination games and whether changing the incentives of players to teach leads to more effi-cient coordination. We ran experiments where subjects played one of four coordination games in constant pairings, where the incentives to teach were varied along two dimensions – the short run cost of teaching and the long run benefit to teaching. We show which aspects of the game lead subjects to adopt long run teaching strategies, and show that subjects try to manipulate their opponent’s actions to pull them out of a situation of coordination fail-ure. We also show that extending a model of decision making by introducing a forward-looking component helps to track teachers ’ behaviour more accu-rately, and describes the way players behave in a more unified way across both teachers and learners. JEL codes: C91, D43, D83 ∗We would like to thank the Co-Editor, Jordi Brandts, and two anonymous referees whose suggestions have led to a substantially improved version. We are very indebted to participants at the ESA conference (Lyon), the Congress of the French Economic Science Association and seminar participants at Zaragoza Logistics Center for valuable comments. We also thank Maxim Frolov for his technical assistance. Financial support from SMU (URC Grant), the CNRS and Louis Lévy-Garboua (PPF project) is gratefully acknowledged. All remaining errors are our own