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Leadership and overcoming coordination failure with asymmetric costs

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Author Info

  • 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.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10683-007-9182-0
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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. John B Van Huyck & Raymond C Battalio & Richard O Beil, 1997. "Tacit coordination games, strategic uncertainty, and coordination failure," Levine's Working Paper Archive 1225, David K. Levine.
  2. 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, vol. 82(2), pages 194-216, July.
  3. 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.
  4. Gary Bornstein & Uri Gneezy & Rosemarie Nagel, 1999. "The effect of intergroup competition on group coordination: An experimental study," Economics Working Papers 393, Department of Economics and Business, Universitat Pompeu Fabra.
  5. Jordi Brandts & David J. Cooper, 2004. "A Change Would Do You Good... An Experimental Study on How to Overcome Coordination Failure in Organizations," Working Papers 115, Barcelona Graduate School of Economics.
  6. 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, vol. 5(6), pages 1223-1268, December.
  7. Enrique Fatas & Tibor Neugebauer & Javier Perote, 2006. "Within-Team Competition In The Minimum Effort Coordination Game," Pacific Economic Review, Wiley Blackwell, vol. 11(2), pages 247-266, 06.
  8. Weber, Roberto & Camerer, Colin F. & Knez, Marc, 1996. "The Illusion of Leadership," Working Papers 992, California Institute of Technology, Division of the Humanities and Social Sciences.
  9. 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.
  10. Camerer, Colin F. & Knez, Marc & Weber, Roberto A., 1996. "Timing and Virtual Observability in Ultimatum Bargaining and Weak Link Coordination Games," Working Papers 970, California Institute of Technology, Division of the Humanities and Social Sciences.
  11. 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.
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Citations

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Cited by:
  1. 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.
  2. 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.
  3. 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.
  4. Arno Riedl & Ingrid M.T. Rohde & Martin Strobel, 2011. "Efficient Coordination in Weakest-Link Games," Working Papers 201103, Murat Sertel Center for Advanced Economic Studies, Istanbul Bilgi University.
  5. repec:hal:cesptp:hal-00607232 is not listed on IDEAS
  6. 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.
  7. Rachel Croson & Enrique Fatas & Tibor Neugebauer, 2006. "An Experimental Analysis Of Conditional Cooperation," Working Papers. Serie AD 2006-24, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. Heijden, E.C.M. van der & Moxnes, E., 2011. "Leading by Example to Protect the Environment; Do the Costs of Leading Matter?," Discussion Paper 2011-043, Tilburg University, Center for Economic Research.
  9. 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.
  10. Kyle Hyndman & Antoine Terracol & Jonathan Vaksmann, 2009. "Learning and sophistication in coordination games," Experimental Economics, Springer, vol. 12(4), pages 450-472, December.
  11. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2009. "Motivating teammates: The leader's choice between positive and negative incentives," Journal of Economic Psychology, 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. 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.
  14. Chong, Sophia & Guillen, Pablo, 2012. "The discreet charm of the collective contract," Working Papers 2012-03, University of Sydney, School of Economics.
  15. Philip J. Grossman & Mana Komai & James E. Jensen, 2012. "Leadership and Gender in Groups: An Experiment," Development Research Unit Working Paper Series 42-12, Monash University, Department of Economics.
  16. 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.

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