Developmental asymmetries in equilibrium selection

Abstract

Coordination problems are central to social and economic life and often involve multiple equilibria. Classical theories identify two fundamental principles for equilibrium selection: maximizing payoffs and minimizing strategic risk. Yet little is known about how these principles emerge over the life cycle. Using a large sample of more than 2,000 participants spanning childhood, adolescence, and early adulthood, we document a sharp developmental asymmetry between payoff-based and risk-based coordination. Payoff-based coordination is already prevalent at the earliest ages studied and remains remarkably stable across development, with similar trajectories across cognitive ability and gender groups. In contrast, risk-based coordination emerges gradually and increases steadily with age. This developmental gradient is highly heterogeneous: it is concentrated among high-ability individuals and largely driven by males, while low-ability individuals and females display considerably flatter trajectories. These findings show that coordination is not developmentally uniform and that sensitivity to strategic uncertainty is progressively acquired rather than automatically available, revealing that similar coordination outcomes can be supported by fundamentally different underlying mechanisms.