Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game
Many situations require coordinated actions of individuals to achieve common goals. Such situations include organizing mass protests or adjusting behavior to new behavioral recommendations that aim to slow down the spread of a contagious disease. However, there is a risk of coordination failure in s...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-03-01
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| Series: | Behavioral Sciences |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2076-328X/13/3/228 |
| _version_ | 1827751272964423680 |
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| author | Thomas Neumann Paul Bengart Bodo Vogt |
| author_facet | Thomas Neumann Paul Bengart Bodo Vogt |
| author_sort | Thomas Neumann |
| collection | DOAJ |
| description | Many situations require coordinated actions of individuals to achieve common goals. Such situations include organizing mass protests or adjusting behavior to new behavioral recommendations that aim to slow down the spread of a contagious disease. However, there is a risk of coordination failure in such situations that can lead to a worse outcome for those who acted in a coordinated manner than for those who chose not to. In this paper, we investigate the main determinant of individuals’ decisions in these situations to determine whether beliefs regarding the action of others (empirical expectations), beliefs regarding others’ beliefs (normative expectations), or risk attitudes are dominant determinants. To this end, we conducted an experiment analyzing the relationship between an individual’s choices in a stag hunt game, their probabilistic empirical and normative expectations (i.e., first-order and second-order beliefs, respectively), and their risk attitudes. Our central finding is that expectations, not risk attitudes, explain individuals’ strategy selection. In addition, we found evidence that normative expectations are a better predictor of strategy selection than empirical expectations. This could have implications for developing more targeted strategies intended to promote new behavioral standards and to guide individuals’ behavior toward a welfare-maximizing equilibrium. |
| first_indexed | 2024-03-11T06:55:56Z |
| format | Article |
| id | doaj.art-dae533c7ce90470ca527dd322f171710 |
| institution | Directory Open Access Journal |
| issn | 2076-328X |
| language | English |
| last_indexed | 2024-03-11T06:55:56Z |
| publishDate | 2023-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Behavioral Sciences |
| spelling | doaj.art-dae533c7ce90470ca527dd322f1717102023-11-17T09:37:51ZengMDPI AGBehavioral Sciences2076-328X2023-03-0113322810.3390/bs13030228Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt GameThomas Neumann0Paul Bengart1Bodo Vogt2Health Services Research, University of Siegen, 57076 Siegen, GermanyEmpirical Economics, Otto von Guericke University Magdeburg, 39106 Magdeburg, GermanyEmpirical Economics, Otto von Guericke University Magdeburg, 39106 Magdeburg, GermanyMany situations require coordinated actions of individuals to achieve common goals. Such situations include organizing mass protests or adjusting behavior to new behavioral recommendations that aim to slow down the spread of a contagious disease. However, there is a risk of coordination failure in such situations that can lead to a worse outcome for those who acted in a coordinated manner than for those who chose not to. In this paper, we investigate the main determinant of individuals’ decisions in these situations to determine whether beliefs regarding the action of others (empirical expectations), beliefs regarding others’ beliefs (normative expectations), or risk attitudes are dominant determinants. To this end, we conducted an experiment analyzing the relationship between an individual’s choices in a stag hunt game, their probabilistic empirical and normative expectations (i.e., first-order and second-order beliefs, respectively), and their risk attitudes. Our central finding is that expectations, not risk attitudes, explain individuals’ strategy selection. In addition, we found evidence that normative expectations are a better predictor of strategy selection than empirical expectations. This could have implications for developing more targeted strategies intended to promote new behavioral standards and to guide individuals’ behavior toward a welfare-maximizing equilibrium.https://www.mdpi.com/2076-328X/13/3/228coordination gamesfirst-order beliefssecond-order beliefsrisk attitudesuncertaintyexperimental economics |
| spellingShingle | Thomas Neumann Paul Bengart Bodo Vogt Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game Behavioral Sciences coordination games first-order beliefs second-order beliefs risk attitudes uncertainty experimental economics |
| title | Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game |
| title_full | Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game |
| title_fullStr | Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game |
| title_full_unstemmed | Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game |
| title_short | Which Expectations to Follow: The Impact of First- and Second-Order Beliefs on Strategy Choices in a Stag Hunt Game |
| title_sort | which expectations to follow the impact of first and second order beliefs on strategy choices in a stag hunt game |
| topic | coordination games first-order beliefs second-order beliefs risk attitudes uncertainty experimental economics |
| url | https://www.mdpi.com/2076-328X/13/3/228 |
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