Leadership and Overcoming Coordination Failure with Asymmetric Costs

David Cooper (david-j-cooper@uiowa.edu), Enrique Fatas (enrique.fatas@universidadeuropea.es) and Jordi Brandts

No 298, Working Papers from Barcelona School of Economics

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)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Leadership and overcoming coordination failure with asymmetric costs (2007)
Working Paper: Leadership and Overcoming Coordination Failure with Asymmetric Costs (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:298

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