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Communication in Asymmetric Group Competition over Public Goods

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Author Info
Jingjing Zhang
Abstract

This paper examines whether and how communication can help groups solve coordination and free-rider problems when they compete with another group for a public-good prize. We find that when group members make an anonymous individual decision on whether or not to contribute to the group success, within-group cheap talk communication significantly reduces miscoordination and free-riding. To measure how much miscoordination remains when communication is allowed, we employ a control treatment where we remove coordination and free-riding incentives by having group members reach a unanimous group decision on how much to contribute. We find that group level contributions are not significantly different in the two cases. Communication therefore completely eliminates miscoordination and free-riding within groups and leads group members to act as one agent in making decisions. Content analysis of group communication reveals that groups explicitly designate specific contributors following a rotation scheme and they understand the essence of implementing mixed strategy equilibrium.

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Paper provided by McMaster University in its series Department of Economics Working Papers with number 2009-06.

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Length: 40 pages
Date of creation: Sep 2009
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Handle: RePEc:mcm:deptwp:2009-06

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Related research
Keywords: Group contests; Threshold public goods; Coordination; Cheap talk Communication; Content analysis; Experiments;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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