Judith Mehta

Focal points in pure coordination games:An experimental investigation

This paper reports an experimental investigation of the hypothesis that in coordination games, players draw on shared concepts of salience to identify ‘focal points’ on which they can coordinate. The experiment involves games in which equilibria can be distinguished from one another only in terms of the way strategies are labelled. The games are designed to test a number of specific hypotheses about the determinants of salience. These hypotheses are generally confirmed by the results of the experiment.

Explaining Focal Points: Cognitive Hierarchy Theory Versus Team Reasoning

This article reports experimental tests of two alternative explanations of how players use focal points to select equilibria in one-shot coordination games. Cognitive hierarchy theory explains coordination as the result of common beliefs about players’ pre-reflective inclinations towards the relevant strategies; the theory of team reasoning explains it as the result of the players’ using a non-standard form of reasoning. We report two experiments. One finds strong support for team reasoning; the other supports cognitive hierarchy theory. In the light of additional questionnaire evidence, we conclude that players’ reasoning is sensitive to the decision context.

An Experimental Investigation of Focal Points in Coordination and Bargaining: Some Preliminary Results

This paper reports an experimental investigation of the hypothesis that convention constitutes a form of common knowledge which people utilise in bargaining games with multiple equilibria. We find that in simple games in which players are rewarded for coordinating their strategies but are not allowed to communicate, people are able to achieve coordination by using shared ideas of “prominence” which lead them to “focal points.” We find we can manipulate focal points in a bargaining game by introducing different “clues” that conventional rational choice theory would treat as external to any solution concept.