Culture-dependent strategies in coordination games

Abstract

We examine different populations' play in coordination games in online experiments with over 1,000 study participants. Study participants played a two-player coordination game that had multiple equilibria: two equilibria with highly asymmetric payoffs and another equilibrium with symmetric payoffs but a slightly lower total payoff. Study participants were predominantly from India and the United States. Study participants residing in India played the strategies leading to asymmetric payoffs significantly more frequently than study participants residing in the United States who showed a greater play of the strategy leading to the symmetric payoffs. In addition, when prompted to play asymmetrically, the population from India responded even more significantly than those from the United States. Overall, study participants' predictions of how others would play were more accurate when the other player was from their own populations, and they coordinated significantly more frequently and earned significantly higher payoffs when matched with other study participants from their own population than when matched across populations.