Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197724 
Year of Publication: 
2017
Series/Report no.: 
ISER Discussion Paper No. 992
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This paper presents an experimental analysis of 2x2 coordination games in which player 1 earns a substantially higher payoff than player 2 except in the inefficient equilibrium where they earn the same payoffs. The main focus is on the comparison of two treatments with and without the ex post redistribution stage in which both players may voluntarily transfer their payoffs earned in the game to the other player. We find that (1) the transfer opportunity raises the probability of coordination on an efficient equilibrium, (2) a transfer from player 1 to player 2 is positive, and is higher when player 2 chooses the action corresponding to the efficient equilibrium, and hence (3) the transfer opportunity tends to improve the efficiency and equity of the final outcome. Furthermore, these tendencies are stronger when the two players have conflicting interests over the two equilibria than when they have common interests.
Subjects: 
heterogeneity
equity
efficiency
transfer
reciprocity
laboratory experiments
JEL: 
C72
D03
D31
D63
Document Type: 
Working Paper

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