Econometric Society 57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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ON SMILES, WINKS, AND HANDSHAKES: CAN THEY ENHANCE COORDINATION?


Category: Economic Theory
Game Experiments I
Monday 26th August 2002, 14:30 - 16:00, Room: 5.4
Session Chair(s): Nick Vriend, Queen Mary, University of London, UNITED KINGDOM

Presenter(s): Vriend, Nick

Co-Author(s): Manzini, Paola and Sadrieh, Abdolkarim

Keyword(s): Coordination games, Cues, Pareto efficiency, Signals, Trust

JEL(s): C72, C91, C92

Abstract:

In an experimental study we focus on a variant of the 'minimum effort game', a coordination game with Pareto ranked equilibria, and risk considerations pointing to the least efficient equilibrium. We examine whether implicit signals such as smiles, winks and handshakes could be employed and recognized by the players as a telltale sign of each other's trustworthiness, thus enabling them to coordinate on the more risky but more rewarding Pareto efficient equilibrium. Our experimental results show that such cues can indeed play a role as coordination devices.


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Paper Reference Number: 296

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57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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