Measuring strategic uncertainty in coordination games

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• dc.contributor.author Heinemann, Frankca
• dc.contributor.author Nagel, Rosemarieca
• dc.contributor.author Ockenfels, Peterca
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2017-07-26T10:51:10Z
• dc.date.available 2017-07-26T10:51:10Z
• dc.date.issued 2004-12-01
• dc.date.modified 2017-07-23T02:08:59Z
• dc.description.abstract This paper explores three aspects of strategic uncertainty: its relation to risk, predictability of behavior and subjective beliefs of players. In a laboratory experiment we measure subjects certainty equivalents for three coordination games and one lottery. Behavior in coordination games is related to risk aversion, experience seeking, and age. From the distribution of certainty equivalents we estimate probabilities for successful coordination in a wide range of games. For many games, success of coordination is predictable with a reasonable error rate. The best response to observed behavior is close to the global-game solution. Comparing choices in coordination games with revealed risk aversion, we estimate subjective probabilities for successful coordination. In games with a low coordination requirement, most subjects underestimate the probability of success. In games with a high coordination requirement, most subjects overestimate this probability. Estimating probabilistic decision models, we show that the quality of predictions can be improved when individual characteristics are taken into account. Subjects behavior is consistent with probabilistic beliefs about the aggregate outcome, but inconsistent with probabilistic beliefs about individual behavior.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=804
• dc.identifier.uri http://hdl.handle.net/10230/465
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 804
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword belief formation
• dc.subject.keyword coordination games
• dc.subject.keyword global game
• dc.subject.keyword lotteries
• dc.subject.keyword risk aversion
• dc.subject.keyword strategic uncertainty
• dc.subject.keyword leex
• dc.subject.keyword Behavioral and Experimental Economics
• dc.title Measuring strategic uncertainty in coordination gamesca
• dc.type info:eu-repo/semantics/workingPaper