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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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References

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Citations

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Cited by:
  1. Riechmann, Thomas & Weimann, Joachim, 2008. "Competition as a coordination device: Experimental evidence from a minimum effort coordination game," European Journal of Political Economy, Elsevier, vol. 24(2), pages 437-454, June.
  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. 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.
  4. K.J.M. De Jaegher & B. Hoyer, 2012. "Cooperation and the common enemy effect," Working Papers 12-24, Utrecht School of Economics.
  5. Cason, Timothy N. & Sheremeta, Roman M. & Zhang, Jingjing, 2012. "Communication and efficiency in competitive coordination games," Games and Economic Behavior, Elsevier, vol. 76(1), pages 26-43.
  6. Heinrich Ursprung, 2012. "The evolution of sharing rules in rent seeking contests: Incentives crowd out cooperation," Public Choice, Springer, vol. 153(1), pages 149-161, October.
  7. Chesney, Thomas & Chuah, Swee-Hoon & Hoffmann, Robert, 2009. "Virtual world experimentation: An exploratory study," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 618-635, October.
  8. 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.
  9. Dirk Engelmann & Hans-Theo Normann, 2010. "Maximum effort in the minimum-effort game," Experimental Economics, Springer, vol. 13(3), pages 249-259, September.
  10. 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.
  11. Eisenkopf, Gerald, 2014. "The impact of management incentives in intergroup contests," European Economic Review, Elsevier, vol. 67(C), pages 42-61.
  12. Gerald Eisenkopf, 2013. "The Impact of Management Incentives in Intergroup Contests," TWI Research Paper Series 87, Thurgauer Wirtschaftsinstitut, Universität Konstanz.

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