Common and almost common knowledge of credible assignments in a coordination game推荐.pdf

Common and almost common knowledge of credible assignments in a coordination game Laura Bangun Ananish Chaudhuri Department of Economics, University of Auckland Department of Economics, University of Auckland Parapin Prak Chenan Zhou Department of Economics, University of Auckland Department of Accounting and Finance, University of Auckland Abstract We build on Van Huyck, Gillette and Battalio (1992) and examine the efficacy of credible assignments in a stag−hunt type coordination game with two Pareto−ranked equilibria, one payoff dominant and the other risk dominant. The majority of our subjects fail to coordinate to the payoff dominant outcome when no assignment is made. However, the majority of them always coordinate to the payoff dominant outcome when an assignment is made. This happens regardless of whether the assignment is “almost common knowledge” or “common knowledge”. We are grateful to the University of Auckland Research Council for providing the funds to conduct the experiments for this study. We thank Professor Charles Holt for providing us access to the Veconlab website at the University of Virginia for carrying out the experiments. Citation: Bangun, Laura, Ananish Chaudhuri, Parapin Prak, and Chenan Zhou, (2006) Common and almost common knowledge of credible assignments in a coordination game. Economics Bulletin, Vol. 3, No. 1 pp. 1−10 Submitted: December 18, 2005. Accepted: January 6, 2006. URL: /2006/volume3/EB−05C90025A.pdf 1. Introduction A nu