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Coordination and Cooperation Problems in Network Good Production

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Author Info

  • Antonie Knigge

    ()
    (Department of Sociology/ICS, Utrecht University, Heidelberglaan 2, 3584 CS, Utrecht, The Netherlands)

  • Vincent Buskens

    ()
    (Department of Sociology/ICS, Utrecht University, Heidelberglaan 2, 3584 CS, Utrecht, The Netherlands
    Erasmus School of Law, Erasmus University Rotterdam, Burgemeester Oudlaan 50, 3062 PA, Rotterdam, The Netherlands)

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    Abstract

    If actors want to reach a particular goal, they are often better off forming collaborative relations and investing together rather than investing separately. We study the coordination and cooperation problems that might hinder successful collaboration in a dynamic network setting. We develop an experiment in which coordination problems are mainly due to finding partners for collaboration, while cooperation problems arise at the investment levels of partners who have already agreed to collaborate. The results show that as costs of forming links increase, groups succeed less often in solving the coordination problem. Still, if subjects are able to solve the coordination problem, they invest in a suboptimal way in the network good. It is mostly found that if cooperation is successful in terms of investment, it is due to subjects being able to monitor how much their partners invest. Moreover, subjects deal better with the coordination and cooperation problems as they gain experience.

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    File URL: http://www.mdpi.com/2073-4336/1/4/357/pdf
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    Bibliographic Info

    Article provided by MDPI, Open Access Journal in its journal Games.

    Volume (Year): 1 (2010)
    Issue (Month): 4 (September)
    Pages: 357-380

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    Handle: RePEc:gam:jgames:v:1:y:2010:i:4:p:357-380:d:9706

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    Related research

    Keywords: network formation; coordination; cooperation; experiments; collective goods;

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    1. Calvo-Armengol, Antoni, 2004. "Job contact networks," Journal of Economic Theory, Elsevier, vol. 115(1), pages 191-206, March.
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    Cited by:
    1. Boris van Leeuwen & Theo Offerman & Arthur Schram, 2013. "Superstars Need Social Benefits: An Experiment on Network Formation," Tinbergen Institute Discussion Papers 13-112/I, Tinbergen Institute.

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