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An experiment in the role of identity in fostering coordination

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Abstract

Coordination problems arise in many economic, political, and social situations. Many times, authorities and institutions are created to solve these coordination problems. However, the success of these institutions depends on whether people are willing to follow their prescriptions. Using a behavioral experiment on Amazon Mechanical Turk we analyze whether an authority can aid in solving hawk-dove coordination games and whether its success depends on a shared identity by the players. The authority is represented in our experiment by a randomizing device that recommends actions to players to implement a socially efficient correlated equilibrium. In the game, players are better off following the recommendations if they believe others will do as well. We investigate whether people are more likely to follow recommendations when they have a shared identity. We find that the device’s success is not driven by group membership, but rather by the content of its recommendations.

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Data availability

The replication material for this study is available at https://doi.org/10.3886/E193903V2.

Notes

  1. The advent of the global games literature in both economics (e.g., Angeletos et al., 2007; Carlsson & Van Damme, 1993; Morris & Shin, 1998) and political science, (e.g., Aldama et al., 2019; Casper & Tyson, 2014; Malis & Smith, 2019) has been developed partially to come up with unique equilibrium predictions in coordination games.

  2. Importantly, however, some institutions could not only influence players’ beliefs about others’ actions but also their preferences over them.

  3. For a review of the experimental literature on cheap-talk communication see Crawford (1998).

  4. In contrast to our study, Chen and Chen (2011) focus on equilibrium selection, rather than on the implementation of a correlated equilibrium.

  5. It is important to note that in this case, neither payoff dominance nor risk dominance make a prediction of which equilibrium should be selected.

  6. For detailed discussions on correlated equilibria see Aumann (1974) and Fudenberg and Tirole (1991: pp. 53–59).

  7. The lowest possible symmetrical payoff, 20, is given by \(a=b=d=\tfrac{1}{3}\), \(c=0\).

  8. In fact, in equilibrium only probabilities that \(p=0\) or \(p=1\) can be sustained.

  9. This was done to ensure the quality of the responses as suggested in Kennedy et al. (2020).

  10. A full set of demographic characteristics divided by treatment condition is available in the Online Appendix.

  11. Screenshots of the instructions are included in the Online Appendix.

  12. For a discussion on how this helps ensure quality, see Hauser et al. (2019).

  13. Equal payoffs are presented in the off-diagonal in an effort to try to make them less immediately salient to participants and have them consider the full payoff table.

  14. Though this was not known by participants ex-ante, given our ex-post matching procedure, in the end, the actions of five participants had to be matched with a player for a second time, though they were only paid for the first match.

  15. In a pilot, we used Smartriqs (Molnar, 2019) to enable people to play at the same time but wait times on MTurk made the ex-post matching a more efficient mechanism.

  16. Of course, the more risk averse participants are, the more likely they would be to choose Dove, even when recommended Hawk, unless they are fairly certain that the other player will choose Dove.

  17. A notable exception being Chen and Chen (2011).

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Acknowledgements

For discussions and comments on previous iterations of this project we thank the editor, Dirk Engelmann, two anonymous reviewers, Joel Blaxland, Cristina Bicchieri, Eric Dickson, Eugen Dimant, Jana Freundt, Mateo Vásquez-Cortés and seminar participants at SPSA, NYU New York and NYU Abu Dhabi. We thank the University of Pennsylvania for providing funding.

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  1. Vote Rev, New York, NY, USA

    Abraham Aldama

  2. University of Pennsylvania, Philadelphia, PA, USA

    Daniel Draganoff & Gantavya Pahwa

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  1. Abraham Aldama
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Correspondence to Abraham Aldama.

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Aldama, A., Draganoff, D. & Pahwa, G. An experiment in the role of identity in fostering coordination. J Econ Sci Assoc (2024). https://doi.org/10.1007/s40881-023-00158-y

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