Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149024
Authors: 
Külpmann, Philipp
Khantadze, Davit
Year of Publication: 
2016
Series/Report no.: 
Working Papers, Center for Mathematical Economics 567
Abstract: 
We investigate the effect of absence of common knowledge on the outcomes of coordination games in a laboratory experiment. Using cognitive types, we can explain coordination failure in pure coordination games while differentiating between coordination failure due to first- and higher-order beliefs. In our experiment, around 76% of the subjects have chosen the payoff-dominant equilibrium strategy despite the absence of common knowledge. However, 9% of the players had first-order beliefs that lead to coordination failure and another 9% exhibited coordination failure due to higher-order beliefs. Furthermore, we compare our results with predictions of commonly used models of higher-order beliefs.
Subjects: 
Higher-order beliefs
coordination failure
cognitive abilities
experimental economics
game theory
JEL: 
C72
C92
D83
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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