Comparing Subsidies to Solve Coordination Failure

Roweno Heijmans and Sigrid Suetens
Additional contact information
Sigrid Suetens: University of Groningen

No 2025004-EEF, Research Report from University of Groningen, FEB Research Institute (FEBRI)

Abstract: We use experiments to systematically test the performance of subsidies aimed at inducing efficient coordination in a coordination game. We consider two classes of policies: those based on divide-and-conquer (i.e. iterated dominance) and those making the efficient Nash equilibrium of the game risk dominant. Cost-efficient policies from both classes are equally expensive but differ in the distribution of subsidies among agents. Our results show that risk dominance subsidies increase coordination more effectively or at a lower cost than divide-and-conquer subsidies.

Date: 2025
New Economics Papers: this item is included in nep-exp, nep-gth and nep-inv
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/11370/b848b64e-bc1b-4473-814c-a3d77c7d1e2d (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gro:rugfeb:2025004-eef

Access Statistics for this paper

More papers in Research Report from University of Groningen, FEB Research Institute (FEBRI) Contact information at EDIRC.
Bibliographic data for series maintained by Hanneke Tamling ().