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THE FOCAL POINT IN THE TRAVELLER'S DILEMMA: AN EXPERIMENTAL STUDY
Author(s) -
Morone Andrea,
Morone Piergiuseppe
Publication year - 2016
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12086
Subject(s) - rationality , pareto principle , dilemma , point (geometry) , economics , pareto efficiency , set (abstract data type) , mathematical economics , pareto optimal , test (biology) , focal point , choice set , microeconomics , positive economics , econometrics , computer science , mathematics , epistemology , operations management , cardinal point , paleontology , philosophy , physics , geometry , optics , biology , programming language
This paper provides an experimental test of the traveller's dilemma. Our investigation aims to address the research hypothesis that introducing a reference point à la Schelling (set equal to the Pareto optimal solution) might drive people away from rationality even when the size of the penalty/reward is high. Experimental findings reported in this paper provide answers to this question showing that the reference point did not encourage coordination around the Pareto optimal choice.