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Leadership and overcoming coordination failure with asymmetric costs

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  • Jordi Brandts

    ()

  • David Cooper

    ()

  • Enrique Fatas

    ()

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.

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Bibliographic Info

Article provided by Springer in its journal Experimental Economics.

Volume (Year): 10 (2007)
Issue (Month): 3 (September)
Pages: 269-284

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Handle: RePEc:kap:expeco:v:10:y:2007:i:3:p:269-284

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Web page: http://www.springerlink.com/link.asp?id=102888

Related research

Keywords: Experiments; Coordination; Organizational change; Heterogeneous agents; Leadership; C70; C90; D63; D64;

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References

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  1. Jordi Brandts & David J. Cooper, 2004. "A Change Would Do You Good . . . An Experimental Study on How to Overcome Coordination Failure in Organizations," UFAE and IAE Working Papers 606.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Weber, Roberto & Camerer, Colin F. & Knez, Marc, 1996. "The Illusion of Leadership," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 992, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. 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.
  4. J. B. Van Huyck & R. C. Battalio & R. O. Beil, 2010. "Tacit coordination games, strategic uncertainty, and coordination failure," Levine's Working Paper Archive 661465000000000393, David K. Levine.
  5. Enrique Fatas & Tibor Neugebauer & Javier Perote, 2005. "Within-Team Competition in the Minimum Effort Coordination Game," Experimental, EconWPA 0503006, EconWPA.
  6. David Cooper & John H. Kagel, 2003. "Lessons Learned: Generalizing Learning Across Games," American Economic Review, American Economic Association, vol. 93(2), pages 202-207, May.
  7. Roberto A. Weber, 2006. "Managing Growth to Achieve Efficient Coordination in Large Groups," American Economic Review, American Economic Association, vol. 96(1), pages 114-126, March.
  8. Camerer, Colin F. & Knez, Marc & Weber, Roberto A., 1996. "Timing and Virtual Observability in Ultimatum Bargaining and Weak Link Coordination Games," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 970, California Institute of Technology, Division of the Humanities and Social Sciences.
  9. Jordi Brandts & David J. Cooper, 2007. "It's What You Say, Not What You Pay: An Experimental Study of Manager–Employee Relationships in Overcoming Coordination Failure," Journal of the European Economic Association, MIT Press, MIT Press, vol. 5(6), pages 1223-1268, December.
  10. Blume, Andreas & Ortmann, Andreas, 2007. "The effects of costless pre-play communication: Experimental evidence from games with Pareto-ranked equilibria," Journal of Economic Theory, Elsevier, vol. 132(1), pages 274-290, January.
  11. Knez, Marc & Camerer, Colin, 2000. "Increasing Cooperation in Prisoner's Dilemmas by Establishing a Precedent of Efficiency in Coordination Games," Organizational Behavior and Human Decision Processes, Elsevier, Elsevier, vol. 82(2), pages 194-216, July.
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Citations

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Cited by:
  1. Al-Ubaydli, Omar & Jones, Garett & Weel, Jaap, 2010. "Patience, cognitive skill and coordination in the repeated stag hunt," MPRA Paper 27723, University Library of Munich, Germany.
  2. Riedl, Arno & Rohde, Ingrid M.T. & Strobel, Martin, 2011. "Efficient Coordination in Weakest-Link Games," IZA Discussion Papers 6223, Institute for the Study of Labor (IZA).
  3. Kyle Hyndman & Antoine Terracol & Jonathan Vaksmann, 2009. "Learning and sophistication in coordination games," Experimental Economics, Springer, Springer, vol. 12(4), pages 450-472, December.
  4. Seyed Komail Tayebi & Ahmad Googerdchian, 2007. "A Difference-in-Differences (DID) Analysis of Financial Integration and International Trade in ASEAN+5," Iranian Economic Review, Economics faculty of Tehran university, vol. 12(3), pages 109-126, fall & wi.
  5. 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.
  6. Philip J. Grossman & Mana Komai & James E. Jensen, 2012. "Leadership and Gender in Groups: An Experiment," Monash Economics Working Papers 42-12, Monash University, Department of Economics.
  7. Donna Harris & Klaus Abbink, 2012. "In-group favouritism and out-group discimination in naturally occurring groups," Economics Series Working Papers 616, University of Oxford, Department of Economics.
  8. Julie Beugnot & Zeynep Gürgüç & Frederik Roose Øvlisen & Michael M. W. Roos, 2012. "Coordination failure caused by sunspots," Economics Bulletin, AccessEcon, vol. 32(4), pages 2860-2869.
  9. Stefania Bortolotti & Giovanna Devetag & Andreas Ortmann, 2009. "Exploring the effects of real effort in a weak-link experiment," CEEL Working Papers 0901, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  10. Chong, Sophia & Guillen, Pablo, 2012. "The discreet charm of the collective contract," Working Papers 2012-03, University of Sydney, School of Economics.
  11. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2009. "Motivating teammates: The leader's choice between positive and negative incentives," Journal of Economic Psychology, Elsevier, Elsevier, vol. 30(4), pages 591-607, August.
  12. Ioannou, Christos A. & Makris, Miltiadis, 2014. "An Experimental Study Of Uncertainty In Coordination Games," Discussion Paper Series In Economics And Econometrics 1401, Economics Division, School of Social Sciences, University of Southampton.
  13. Rachel Croson & Enrique Fatas & Tibor Neugebauer, 2006. "An Experimental Analysis Of Conditional Cooperation," Working Papers. Serie AD, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 2006-24, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  14. Sarah Jacobson & Jason Delaney, 2012. "The Good of the Few: Reciprocity and the Provision of a Public Bad," Department of Economics Working Papers 2014-03, Department of Economics, Williams College, revised May 2014.
  15. Heijden, E.C.M. van der & Moxnes, E., 2011. "Leading by Example to Protect the Environment; Do the Costs of Leading Matter?," Discussion Paper, Tilburg University, Center for Economic Research 2011-043, Tilburg University, Center for Economic Research.

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