# Compromise or Alternation? Experimental Evidence on Coordination Under Payoff Asymmetry

## TL;DR

This study explores how differences in payoffs affect coordination strategies in a game, finding that higher asymmetry leads to more compromise choices.

## Contribution

The paper experimentally shows how varying payoff asymmetry influences adoption of compromise versus alternation strategies in coordination games.

## Key findings

- Higher payoff asymmetry increases adoption of the compromise option.
- Repeated interaction improves coordination rates despite initial asymmetry.
- Alternation is more efficient than compromise but both improve fairness.

## Abstract

While the previous literature identifies the compromise option as a potential coordination device, it remains unclear how varying degrees of payoff asymmetry affect its adoption. This study experimentally examines coordination behavior in a repeated battle-of-the-sexes (BOS) game with a compromise option across three distinct levels of payoff asymmetry. We implement three between-subjects treatments that vary the degree of payoff asymmetry in the original BOS game while fixing the payoff for the compromise option. Under a hybrid matching protocol, we find that when the payoff asymmetry is higher, more groups coordinate on the compromise option. While payoff asymmetry initially reduces the coordination rate, repeated interaction mitigates this effect through learning. The alternation strategy is shown to be more efficient than the compromise one, though both enhance fairness. Our results reveal how the degree of payoff asymmetry influences subjects’ strategy adoption between compromise and alternation.