An Experimental Investigation of Focal Points in Coordination and Bargaining: Some Preliminary Results

This paper reports an experimental investigation of the hypothesis that convention constitutes a form of common knowledge which people utilise in bargaining games with multiple equilibria. We find that in simple games in which players are rewarded for coordinating their strategies but are not allowed to communicate, people are able to achieve coordination by using shared ideas of “prominence” which lead them to “focal points.” We find we can manipulate focal points in a bargaining game by introducing different “clues” that conventional rational choice theory would treat as external to any solution concept.