Paper #1064

Títol:

On the role of non-equilibrium focal points as coordination devices

Autors:

Antoni Bosch-Domènech i Nicolaas J. Vriend

Data:

Febrer 2008

Resum:

Considering a pure coordination game with a large number of equivalent equilibria, we argue, first, that a focal point that is itself not a Nash equilibrium and is Pareto dominated by all Nash equilibria, may attract the players' choices. Second, we argue that such a non-equilibrium focal point may act as an equilibrium selection device that the players use to coordinate on a closely related small subset of Nash equilibria. We present theoretical as well as experimental support for these two new roles of focal points as coordination devices.

Paraules clau:

Coordination game, Focal point, Nash equilibrium, Equilibrium selection, Coordination device, LeeX

Codis JEL:

C72, C91

Àrea de Recerca:

Economia Experimental i del Comportament

Publicat a:

Journal of Economic Behavior and Organization, Volume 94, Pages 52-67, October 2013.

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