THE VARIABLE FRAME-THEORY OF FOCAL POINTS - AN EXPERIMENTAL-STUDY

In variable frame theory a game is played rationally, but which game g ets played is determined by nonrational (e.g., perceptual) player char acteristics. These determine their ''frames''-the sets of attributes o f the objects of choice they think about. The theory implies that it i s rational to play focal points in coordination games with multiple eq uilibria. The reported experiment confirms most of the theory's claims for such games, including the tradeoff theorem: players who can hope to coordinate only by randomizing over a class of objects trade off it s smallness against the probability that it belongs to the partner's f rame. (C) 1997 Academic Press.