Failing to utilize potentially effective focal points: Prominence can stymie coordination on distinct actions

Abstract

Are people skillful in utilizing potential focal points? We find a class of situations for which the answer is negative: the presence of prominent actions appears to stymie the use of distinct actions for coordination. Across several experimental games, we consistently observe that players readily coordinate on a categorically distinct action when all available actions are non-prominent but not when some actions are prominent. For instance, given the action set {Franklin Pierce, James Buchanan, Tianjin}, most players select the Chinese city Tianjin. Yet, given {Abraham Lincoln, George Washington, Tianjin}, they are roughly equally likely to select either American president and unlikely to select Tianjin, and given {Abraham Lincoln, George Washington, Shanghai}, their choices are distributed approximately uniformly. The observation that prominence stymies reliance on distinctiveness informs cognitive hierarchy and team reasoning theories of how people recognize focality.