Discoordination and Miscoordination Caused by Sunspots in the Laboratory
This paper combines two strands of the experimental sunspot literature. It extends the rare literature
that focuses experimentally on the coordination problems caused by sunspot variables. It also extends
the literature that focuses on coordination games that have a payoff-dominant and a divergent
risk-dominant equilibrium. To achieve this, we use a repeated three-player stag hunt game with fixed
groups. In our experiment, a sunspot variable points randomly at the risk-dominant or the payoff-dominant
choice. We find out-of-equilibrium behavior (discoordination) caused by the sunspot variable in
the short run. In the long run, the sunspot variable can lead to coordination of the payoff-dominated
equilibrium (miscoordination). If the sunspot-generating process points more frequently to the
risk-dominant choice, some groups converge to the sunspot equilibrium.