Experimental Economics and Game Theory Seminar for January 31

Events, Seminars | January 27, 2020

Join us for the ICES Seminar in Experimental Economics and Game Theory of the Spring 2020 semester, featuring Ernesto Reuben.

Dr. Reuben, of NYU Abu Dhabi, will discuss his paper Fairness and Coordination: The Role of Fairness Principles in Coordination Failure and Success (Abstract). The talk will take place on Friday, January 31st, from 4:00 to 5:00pm in room 5183 of Vernon Smith Hall, Arlington campus.
Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.

Abstract

We study the role of fairness principles as focal points in coordination problems in homogeneous and heterogeneous groups. To this end, we first elicit normative beliefs concerning how the coordination game should be played. We find that in homogeneous groups people share a unique belief of how to fairly play the game while in heterogeneous groups multiple well-defined but conflicting normative beliefs prevail. In the subsequent coordination game, homogeneous groups are more likely than heterogeneous groups to successfully sustain coordination on efficient equilibria. Interestingly, in both types of groups, equilibria consistent with fairness principles are stable. Hence, the difference between groups occurs because heterogeneous groups find it much harder to reach such fair equilibria. Individual level analysis reveals that subjects who are not playing in accordance to their normative beliefs are more likely to change their behavior, unless their group is coordinating on a fairness principle.

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