An Experimental Study on the Relevance and Scope of Culture as a Focal Point

Abstract

This paper uses an experimental approach to study whether nationality serves as a focal point. We let subjects from Japan, Korea, and China play stag-hunt coordination games in which we vary information about their partner. The results show that subjects are more likely to try to coordinate on the payoff-dominant equilibrium if the only piece of information they have about their partner is that they have the same nationality. However, if subjects receive additional information about their partner, subjects are not more likely to try to coordinate on the payoff dominant equilibrium. We also do not find that subjects are less likely to try to coordinate on the payoff-dominant equilibrium when their partner has a different nationality as compared to when the partner’s nationality is unknown. In addition, we observe that giving subjects information about their partner in general increases the risk of miscoordination. Thus, our findings suggest that nationality can serve as a coordination device but also that the scope of this device is limited.Coordination, Focal points, Cultural economics, Inter-cultural lab experiments, In-group behavior.