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Efficient coordination in the lab

  • Aurora García-Gallego
  • Penélope Hernández-Rojas
  • Amalia Rodrigo-González
Regular Article
  • 56 Downloads

Abstract

We follow the example of Gossner et al. (Econometrica 74(6):1603–1636, 2006) in the design of a finitely repeated 2-player coordination game with asymmetric information. Player 1 and Player 2 and Nature simultaneously decide whether to play 0 or 1 and successful coordination requires that all actions coincide. Nature’s moves are known only by Player 1, while Player 2 observes only the history of Nature and Player 1. In such a theoretical set up, efficient transmission of information takes place when Player 1 uses block codification through signalling mistakes. With this in mind, we test coordination in the lab. We first model and establish the appropriate sequence length played by Nature and the block strategy for lab implementability. We show that the majority rule with 3-length is the optimal block codification for a 55-length sequence. Experimental data supports the main results of the original model with respect to the codification rule using signalling mistakes.

Keywords

Coordination game Experiment Cheap-talk 

JEL Classification

D8 C91 C73 

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.LEE and Economics DepartmentUniversitat Jaume ICastellónSpain
  2. 2.ERI-CES and Department of Economic AnalysisUniversity of ValenciaValenciaSpain
  3. 3.Departamento de Finanzas Empresariales, Facultad de EconomíaUniversity of ValenciaValenciaSpain

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