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Leadership and Overcoming Coordination Failure with Asymmetric Costs

Jordi Brandts, David Cooper () and Enrique Fatas

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We study how the heterogeneity of agents affects the extent to which changes in financial incentives can pull a group out of a situation of coordination failure. We focus on the connections between cost asymmetries and leadership. Experimental subjects interact in groups of four in a series of weak-link games. The treatment variable is the distribution of high and low effort cost across subjects. We present data for one, two and three low-cost subjects as well as control sessions with symmetric costs. The overall pattern of coordination improvement is common across treatments. Early coordination improvements depend on the distribution of high and low effort costs across subjects, but these differences disappear with time. We find that initial leadership in overcoming coordination failure is not driven by low-cost subjects but by subjects with the most frequent cost. This conformity effect can be due to a kind of group identity or to the cognitive simplicity of acting with identical others.

Keywords: Experiments; Coordination; Organizational change; Heterogeneous agents; Leadership (search for similar items in EconPapers)
JEL-codes: C70 C90 D63 D64 (search for similar items in EconPapers)
Pages: 30
Date: 2006-05-12
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp and nep-soc
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Journal Article: Leadership and overcoming coordination failure with asymmetric costs (2007) Downloads
Working Paper: Leadership and Overcoming Coordination Failure with Asymmetric Costs (2006) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:691.07

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