You better play 7: mutual versus common knowledge of advice in a weak-link experiment

Devetag, Giovanna, Hosni, Hykel and Sillari, Giacomo (2013) You better play 7: mutual versus common knowledge of advice in a weak-link experiment. Synthese, 190 (8). pp. 1351-1381. ISSN 0039-7857

Preview

PDF - Accepted Version Download (1MB) | Preview

Abstract

This paper presents the results of an experiment on mutual versus common knowledge of advice in a two-player weak-link game with random matching. Our experimental subjects play in pairs for thirteen rounds. After a brief learning phase common to all treatments, we vary the knowledge levels associated with external advice given in the form of a suggestion to pick the strategy supporting the payoff- dominant equilibrium. Our results are somewhat surprising and can be summarized as follows: in all our treatments both the choice of the efficiency-inducing action and the percentage of efficient equilibrium play are higher with respect to the control treatment, revealing that even a condition as weak as mutual knowledge of level 1 is sufficient to significantly increase the salience of the efficient equilibrium with respect to the absence of advice. Furthermore, and contrary to our hypothesis, mutual knowledge of level 2 induces, under suitable conditions, successful coordination more frequently than common knowledge.

Item Type:	Article
Official URL:	http://www.springerlink.com/content/0039-7857?MUD=...
Additional Information:	© 2012 Springer Science+Business Media B.V.
Divisions:	CPNSS
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited:	02 Nov 2012 13:38
Last Modified:	30 Oct 2024 19:09
URI:	http://eprints.lse.ac.uk/id/eprint/47260

Actions (login required)

View Item