Repetition, Communication, and Coordination Failure

We examine repetition as an institution that affects coordination failure in a game with and without pre-play communication. We use probit regression with random effects to test hypotheses regarding the frequency and form of coordination failure in the presence of repeated play versus one-shot games...

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Bibliographic Details
Published in:Experimental economics : a journal of the Economic Science Association 2004-06, Vol.7 (2), p.141-152
Main Authors: Parkhurst, Gregory Malcolm, Bastian, Chris, Shogren, Jason
Format: Article
Language:English
Subjects:
Communication
Coordination
Economic theory
Economics
Equilibrium
Experimental economics
Failure
Game theory
Games
Hypotheses
Pareto optimum
Regression analysis
Studies
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Summary:We examine repetition as an institution that affects coordination failure in a game with and without pre-play communication. We use probit regression with random effects to test hypotheses regarding the frequency and form of coordination failure in the presence of repeated play versus one-shot games. Our results indicate that repetition without pre-play communication results in a lower frequency of coordination failure relative to one-shot game outcomes. This result is reversed when pre-play communication is allowed. Our evidence also suggests that repeated play coordination failures tend to be suboptimal Nash equilibria, whereas one-shot game coordination failures are disequilibria regardless of the presence of pre-play communication.
ISSN:1386-4157
1573-6938
DOI:10.1023/B:EXEC.0000026976.44467.66