Network Architecture, Salience and Coordination
Source: University of California
This paper reports the results of an experimental investigation of monotone games with imperfect information. Players are located at the nodes of a network and observe the actions of other players only if they are connected by the network. These games have many sequential equilibria; nonetheless, the behavior of subjects in the laboratory is predictable. The network architecture makes some strategies salient and this in turn makes the subjects' behavior predictable and facilitates coordination on efficient outcomes. In some cases, modal behavior corresponds to equilibrium strategies.