Coordination under limited depth of reasoning

This paper provides the first unified explanation of behavior in coordinated attack games under both public and private information. It demonstrates that the main experimental results, such as threshold strategies, comparative statics, and the differences in behavior under public and private information, are robust predictions of limited depth of reasoning models. This is in contrast to equilibrium, which mispredicts the coordinating roles of public and private information. The analysis has implications for understanding macroeconomic phenomena, like currency attacks and debt crises, which are commonly modeled using incomplete information coordinated attack games. •Experimental data from coordinated attack games is analyzed under level-k models.•Level-k is consistent with the coordinating roles of different types of information.•Experimental results are robust predictions of these models.