Cognitive forward induction and coordination without common knowledge: An experimental study

Andreas Blume, Uri Gneezy

Research output: Contribution to journalArticle

23 Scopus citations

Abstract

This paper investigates optimal play in coordination games in which cognition plays an important role. In our game logically omniscient players would be able to identify a distinct coordination opportunity from other obvious facts. Real players may be unable to make the required inference. Our main experimental results are that in a coordination task with a cognitive component (1) players play differently when playing against themselves rather than against another player, and (2) given the opportunity, players signal cognition by choosing the coordination task over an outside option, a phenomenon which we refer to as cognitive forward induction.

Original languageEnglish (US)
Pages (from-to)488-511
Number of pages24
JournalGames and Economic Behavior
Volume68
Issue number2
DOIs
StatePublished - Mar 1 2010
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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