Information transparency and equilibrium selection in coordination games: an experimental study

LIU, Jia and RIYANTO, Yohanes E (2017). Information transparency and equilibrium selection in coordination games: an experimental study. Theory and Decision, 82 (3), 415-433.

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Abstract

We experimentally investigate the role of information transparency for equilibrium selection in stag hunt coordination games. These games can be transformed from a prisoner’s dilemma game by introducing a centralized reward or punishment scheme. We aim to explore the impact of the disclosure of information on how final payoffs are derived on players’ incentive to coordinate on the payoff-dominant equilibrium. We find that such information disclosure significantly increases the tendency of players to play the payoff-dominant strategy and reduces the occurrence of coordination failure. The mechanism works directly through the positive impact of disclosure on the saliency of the payoff-dominant equilibrium, and indirectly through the positive influence of disclosure on players’ belief about the likelihood of cooperation by the opponent.

Item Type:	Article
Uncontrolled Keywords:	Coordination games; Equilibrium selection; Information disclosure; Centralized reward; Centralized punishment; Economic Theory; 14 Economics; 17 Psychology and Cognitive Sciences; 22 Philosophy and Religious Studies
Identification Number:	https://doi.org/10.1007/s11238-016-9572-x
Page Range:	415-433
SWORD Depositor:	Symplectic Elements
Depositing User:	Symplectic Elements
Date Deposited:	19 May 2021 16:06
Last Modified:	07 Jun 2021 13:55
URI:	https://shura.shu.ac.uk/id/eprint/27813

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