Focal points revisited: Team reasoning, the principle of insufficient reason and cognitive hierarchy theory

- Coordination is experimentally investigated using games for which several contemporary accounts of coordination give distinct predictions.
- Game complexity is varied, to account for departures from common knowledge.
- Decisions are observed both against another human and against an algorithm that simulates one of the theoretical decision-making accounts.
- The majority of subjects behave in accord with the team reasoning hypothesis.
- Their proportion decreases as the game complexity rises.

It is well-established that people can coordinate their behaviour on focal points in games with multiple equilibria, but it is not firmly established how. Much coordination game data might be explained by team reasoning, a departure from individualistic choice theory. However, a less exotic explanation is also available based on best-responding to uniform randomisation. We test these two accounts experimentally, using novel games which distinguish their predictions. The results are inconsistent with best-responding to randomisation but consistent with team reasoning as the modal behaviour, though there is also unexplained heterogeneity. Increasing the difficulty of the coordination tasks produces some behaviour suggestive of response to randomisation, but this is a minor feature of the data.