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A Model of Behavior in Coordination Game Experiments

Published online by Cambridge University Press:  14 March 2025

Martin Sefton
Martin Sefton*
Affiliation:
Department of Economics, University of Newcastle, Newcastle-upon-Tyne, NEI 7RU, United Kingdom
*
email: martin.sefton@ncl.ac.uk
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Abstract

This paper constructs a structural model for behavior in expeiments where subjects play a simple coordination game repeatedly under a rotating partner scheme. The model assumes subjects’ actions are stochastic best responses to beliefs about opponents’ choices, and these beliefs update as subjects observe actual choices during the experiment. The model accounts for heterogeneity across subjects by regarding prior beliefs as random effects and estimating their distribution. Maximum likelihood estimates from experimental data suggest that distributions of initial beliefs vary across games, but in all games studied imply a convergence dynamic toward risk-dominant equilibrium.

Keywords

coordination gamesfictitious playunobserved heterogeneity

JEL classification

C9: Design of ExperimentsC1: Econometric and Statistical Methods and Methodology: General

Information

Type
Research Article
Information
Experimental Economics , Volume 2 , Issue 2 , December 1999, pp. 151 - 164
Copyright
Copyright © 1999 Economic Science Association

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