Team Reasoning as a Guide to Coordination

A particular problem of traditional Rational Choice Theory is that
it cannot explain equilibrium selection in simple coordination
games. In this paper we analyze and discuss the solution concept
for common coordination problems as incorporated in the theory of
Team Reasoning (TR). Special consideration is given to TR's concept
of opportunistic choice and to the resulting restrictions in using
private information. We report results from a laboratory experiment
in which teams were given a chance to coordinate on a particular
pattern of behavior in a sequence of HiLo games. A modification of
the stage game offered opportunities to improve on the team goal
through changing this accustomed pattern of behavior. Our
observations throw considerable doubt on the idea of opportunistic
team reasoning as a guide to coordination. Contrary to what TR
would predict, individuals tend to stick to accustomed behavioral
patterns. Moreover, we find that individual decisions are at least
partly determined by private information not accessible to all
members of a team. Alternative theories of choice, in particular
cognitive hierarchy theory may be more suitable to explain the
observed pattern of behavior.