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

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  • Riechmann, Thomas
  • Weimann, Joachim

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.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 24 (2008)
Issue (Month): 2 (June)
Pages: 437-454

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Handle: RePEc:eee:poleco:v:24:y:2008:i:2:p:437-454

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Web page: http://www.elsevier.com/locate/inca/505544

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Citations

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Cited by:
  1. K.J.M. De Jaegher & B. Hoyer, 2012. "Cooperation and the common enemy effect," Working Papers 12-24, Utrecht School of Economics.
  2. Sam Asher & Lorenzo Casaburi & Plamen Nikolov, 2011. "One Step at a Time: Does Gradualism Build Coordination?," Working Papers 1113, University of Namur, Department of Economics.
  3. Heinrich Ursprung, 2011. "The Evolution of Sharing Rules in Rent Seeking Contests: Incentives Crowd Out Cooperation," Working Paper Series of the Department of Economics, University of Konstanz 2011-02, Department of Economics, University of Konstanz.
  4. Gerald Eisenkopf, 2013. "The Impact of Management Incentives in Intergroup Contests," Working Paper Series of the Department of Economics, University of Konstanz 2013-26, Department of Economics, University of Konstanz.
  5. Thomas Chesney & Swee-Hoon Chuah & Robert Hoffmann, 2007. "Virtual world experimentation: An exploratory study," Discussion Papers 2007-14, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  6. Thomas Riechmann & Joachim Weimann, 2004. "Competition as a Coordination Device. Experimental Evidence from a Minimum Effort Coordination Game," Game Theory and Information 0405011, EconWPA.
  7. Timothy N. Cason & Roman M. Sheremeta & Jingjing Zhang, 2010. "Communication and efficiency in competitive coordination games," IEW - Working Papers 505, Institute for Empirical Research in Economics - University of Zurich, revised Feb 2012.
  8. Reuben, Ernesto & Tyran, Jean-Robert, 2010. "Everyone is a winner: Promoting cooperation through all-can-win intergroup competition," European Journal of Political Economy, Elsevier, vol. 26(1), pages 25-35, March.
  9. Eisenkopf, Gerald, 2014. "The impact of management incentives in intergroup contests," European Economic Review, Elsevier, vol. 67(C), pages 42-61.
  10. Dirk Engelmann & Hans-Theo Normann, 2010. "Maximum effort in the minimum-effort game," Experimental Economics, Springer, vol. 13(3), pages 249-259, September.
  11. Gerald Eisenkopf, 2013. "The Impact of Management Incentives in Intergroup Contests," TWI Research Paper Series 87, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  12. Eisenkopf, Gerald, 2013. "Management Impact in an Experimental Intergroup Contest," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79863, Verein für Socialpolitik / German Economic Association.

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