Competition and Coordination in Experimental Minority Games

This work presents experimental results on a coordination game in which agents must repeatedly choose between two sides, and a positive fixed payoff is assigned only to agents who pick the minoritarian side. We conduct laboratory experiments in which stationary groups of five players play the game for 100 periods, and manipulate two treatment variables: the amount of information about other players' past choices and the salience of information regarding the game history (i.e., the length of the string of past outcomes that players can see on the screen while choosing). Our results show that, at the aggregate level a quite remarkable degree of coordination is achieved. Providing players with full information about other players' choices does not appear to improve efficiency significantly. On the other hand, increasing the amount of information about past market outcomes that is displayed on players terminals seems to lead, on average, to a higher level of allocative efficiency. At the individual level, players' choices show a significant degree of inertia. Finally, there is evidence that groups learn over time to self-organize: players' strategies seems to co-evolve to reach a higher level of aggregate payoff compared tothe benchmark given by the symmetric mixed strategy equilibrium