Do Players' Beliefs or Risk Attitudes Determine

The Equilibrium Selections in 2x2 Coordination Games?

Abstract

This study focuses on the question whether it is risk aversion or the beliefs of players that explains the strategic choices in 2x2 coordination games. In a laboratory experiment, we elicit the risk attitudes by using lottery choices. Furthermore, using a quadratic scoring rule, subjects' beliefs about the choice of the opponent are elicited directly. Our data show that participants' behavior is not explained by risk attitude, but rather is explained as their best response to their stated first order beliefs.