Guest lecture 23 February – Arno Riedl on neighborhood choice in cooperation and coordination games

Arno Riedl from the Centre for Neuroeconomics at Maastricht University will be visiting the Brain, Mind & Markets Laboratory and the Department of Economics on Friday 23 February, and giving a guest lecture from 10:30 am until 11:45am in room 605 of the FBE building. All are welcome to attend!

Title of talk: Neighborhood Choice in Cooperation and Coordination Games

Abstract: Problems of cooperation and coordination are ubiquitous in the economy and society. These problems are related but differ in crucial aspects. Cooperation problems are characterized by an inefficient dominant strategy Nash equilibrium and an efficient non-Nash outcome. Coordination problems posses several Nash equilibria that are often Pareto rankable. Interestingly, experimental research shows that when played repeatedly both problems converge to similar outcomes. In both problems often convergence to the inefficient Nash equilibrium is observed. Most of this findings come from games where players are forced to interact. In the field, however, players are often free to choose their interaction neighborhood. Using laboratory experiments, we study the effect of neighborhood choice on behavior in cooperation and coordination games. We find that generally neighborhood choice significantly increases cooperation and that outside options and information about past choices significantly affect this result. Similarly, in coordination games neighborhood choices boosts efficient interaction. In both games the temporary exclusion of respectively non-cooperative and inefficient players drive the result. In coordination games there is also evidence that self-protection without punishment by exclusion may already sufficient to guarantee efficient coordination.