Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85016
Authors: 
Bland, James
Nikiforakis, Nikos
Year of Publication: 
2013
Series/Report no.: 
Preprints of the Max Planck Institute for Research on Collective Goods 2013/19
Abstract: 
When agents face coordination problems their choices often impose externalities on third parties. We investigate whether such externalities can affect equilibrium selection in a series of one-shot coordination games varying the size and the sign of the externality. We find that third-party externalities have a limited effect on decisions. A large majority of participants in the experiment are willing to take an action that increases their income slightly, even if doing so causes substantial inequalities and reductions in overall efficiency. Individuals revealed to be other-regarding in a non-strategic allocation task often behave as-if selfish when trying to coordinate.
Subjects: 
social preferences
efficiency
externalities
tacit coordination
equilibrium selection
JEL: 
D63
D01
D62
C90
D03
Document Type: 
Working Paper

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