A Road to Efficiency through Communication and Commitment

Ala Avoyan and João Ramos

American Economic Review, 2023, vol. 113, issue 9, 2355-81

Abstract: We experimentally examine the efficacy of a novel pre-play institution in a well-known coordination game—the minimum-effort game—in which coordination failures are robust and persistent phenomena. This new institution allows agents to communicate while incrementally committing to their words, leading to a distinct theoretical prediction: the efficient outcome is uniquely selected in the extended coordination game. We find that commitment-enhanced communication significantly increases subjects' payoffs and achieves higher efficiency levels than various nonbinding forms of communication. We further identify the key ingredients of the institution that are central to achieving such gains.

JEL-codes: C73 C92 D83 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20171014 (application/pdf)
https://doi.org/10.3886/E185662V1 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20171014.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20171014.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:aecrev:v:113:y:2023:i:9:p:2355-81

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20171014

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().