Explaining Focal Points: Cognitive Hierarchy Theory versus Team Reasoning

Bardsley, Nicholas (2009) Explaining Focal Points: Cognitive Hierarchy Theory versus Team Reasoning. The Economic Journal . (In Press)

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Abstract

This paper 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.

Item Type:Article
Subjects:1. Frameworks for Research and Research Designs > 1.9 Experimental Research
ID Code:532
Deposited By: NCRM users
Deposited On:03 Mar 2009 09:41
Last Modified:03 Mar 2009 09:41

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