AN EXPERIMENTAL STUDY ON THE RELEVANCE AND SCOPE OF NATIONALITY AS A COORDINATION DEVICE

In a period marked by extensive cross‐national interactions, nationality may present an important focal point that individuals coordinate on. This study uses an experimental approach to study whether nationality serves as a coordination device. We let subjects from Japan, Korea, and China play coordination games in which we vary information about their partner. The results show that nationality serves as a coordination device if common nationality is the only piece of information available to the subjects. The strength of this device is nationality‐dependent and diminishes when participants are provided with additional information about their partner. We also find that subjects are likely to coordinate on the Pareto‐dominant equilibrium at about the same rate if the partner has a different nationality than if nationality is unknown. (JEL C91, C92, Z1, Z13)