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Managing Growth to Achieve Efficient Coordination in Large Groups

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Author Info
Roberto A. Weber
Abstract

Previous experiments using the minimum-effort coordination game reveal a striking regularity—large groups never coordinate efficiently. Given the frequency with which large real-world groups, such as firms, face similarly difficult coordination problems, this poses an important question: Why do we observe large, successfully coordinated groups in the real world when they are so difficult to create in the laboratory? This paper presents one reason. The experiments show that, even though efficient coordination does not occur in groups that start off large, efficiently coordinated large groups can be "grown." By starting with small groups that find it easier to coordinate, we can add entrants—who are aware of the group's history—to create efficiently coordinated large groups. This represents the first experimental demonstration of large groups tacitly coordinated at high levels of efficiency.

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 96 (2006)
Issue (Month): 1 (March)
Pages: 114-126
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Handle: RePEc:aea:aecrev:v:96:y:2006:i:1:p:114-126

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  1. Bornstein, Gary & Gneezy, Uri & Nagel, Rosmarie, 2002. "The effect of intergroup competition on group coordination: an experimental study," Games and Economic Behavior, Elsevier, vol. 41(1), pages 1-25, October. [Downloadable!] (restricted)
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  1. Roberto Weber & Colin Camerer, 2006. "“Behavioral experiments†in economics," Experimental Economics, Springer, vol. 9(3), pages 187-192, September. [Downloadable!] (restricted)
  2. Gary Charness & Chun-Lei Yang, 2008. "Endogenous Group Formation and Public Goods Provision: Exclusion, Exit, Mergers, and Redemption," University of California at Santa Barbara, Economics Working Paper Series 13-08, Department of Economics, UC Santa Barbara. [Downloadable!]
  3. Jordi Brandts & David J. Cooper & Enrique Fatas, 2006. "Leadership and Overcoming Coordination Failure with Asymmetric Costs," UFAE and IAE Working Papers 691.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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  4. Goppelsroeder, Marie, 2009. "Entry in Collusive Markets: An Experimental Study," MPRA Paper 14707, University Library of Munich, Germany. [Downloadable!]
  5. Giovanna Devetag & Andreas Ortmann, 2007. "When and why? A critical survey on coordination failure in the laboratory," Experimental Economics, Springer, vol. 10(3), pages 331-344, September. [Downloadable!] (restricted)
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  6. John Hamman & Scott Rick & Roberto Weber, 2007. "Solving coordination failure with “all-or-none” group-level incentives," Experimental Economics, Springer, vol. 10(3), pages 285-303, September. [Downloadable!] (restricted)
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This page was last updated on 2009-11-16.

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