Leadership and Overcoming Coordination Failure with Asymmetric Costs
AbstractWe 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 InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 691.07.
Date of creation: 12 May 2006
Date of revision:
Experiments; Coordination; Organizational change; Heterogeneous agents; Leadership;
Other versions of this item:
- Jordi Brandts & David Cooper & Enrique Fatas, 2007. "Leadership and overcoming coordination failure with asymmetric costs," Experimental Economics, Springer, vol. 10(3), pages 269-284, September.
- Jordi Brandts & David J. Cooper & Enrique Fatas, 2006. "Leadership and Overcoming Coordination Failure with Asymmetric Costs," Working Papers 298, Barcelona Graduate School of Economics.
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-09 (All new papers)
- NEP-BEC-2007-04-09 (Business Economics)
- NEP-CBE-2007-04-09 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-04-09 (Experimental Economics)
- NEP-SOC-2007-04-09 (Social Norms & Social Capital)
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