Competition as a coordination device: Experimental evidence from a minimum effort coordination game

Thomas Riechmann and Joachim Weimann

European Journal of Political Economy, 2008, vol. 24, issue 2, 437-454

Abstract: This paper presents a means of fostering efficient coordination in minimum effort coordination games, inter-group competition. In a series of laboratory experiments, we reveal that the true reason for coordination failure is strategic uncertainty, which can be reduced almost completely by introducing an appropriately designed mechanism of (inter-group) competition. We uncover the reasons why competition works as a coordination device and how the mechanism of competition should be designed in order to achieve a maximum degree of efficiency.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:24:y:2008:i:2:p:437-454

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