Coordination Games in Continuous Time

Abstract

This paper studies the impact of continuous time interaction on two iconic coordination games: stag hunt and battle of the sexes in a laboratory environment and compare results to possible theoretical explanations. Experimental results show that subjects consistently coordinate better in continuous time than in discrete time under various treatment environments. In continuous time, they are also more likely to converge to payoff-dominant equilibrium in stag hunt games and alternating dynamics in battle of the sexes games. Furthermore, the coordination rate is affected by complexity of action sets and weakly influenced by payoff matrices. The paper also explores some stylized facts that result in the treatment effects.