A Resource-Rational Mechanistic Account of Human Coordination Strategies

AbstractHumans often coordinate their actions in order to reach a mutually advantageous state. These circumstances are chiefly modeled by coordination games, a well-known class of games extensively studied in behavioral economics. In this work, we present the first resource-rational mechanistic approach to coordination games, showing that a variant of normative expected-utility maximization acknowledging cognitive limitations can account for several major experimental findings on human coordination behavior in strategic settings. Concretely, we show that Nobandegani et al.'s (2018) rational process model, sample-based expected utility, provides a unified account of (1) the effect of time pressure on human coordination, and (2) how systematic variations of risk- vs. payoff-dominance affect coordination behavior. Importantly, Harsanyi and Selten’s (1988) Nobel-winning theory of equilibrium selection fails to account for (1-2). As such, our work suggests that the optimal use of limited cognitive resources may lie at the core of human coordination behavior.

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