Reducing Efficiency through Communication in Competitive Coordination Games
AbstractCostless pre-play communication has been found to effectively facilitate coordination and enhance efficiency by increasing individual payoffs in games with Pareto-ranked equilibria. We report an experiment in which two groups compete in a weakest-link contest by expending costly efforts. Allowing group members to communicate before choosing efforts leads to more aggressive competition and greater coordination, but also results in substantially lower payoffs than a control treatment without communication. Our experiment thus provides evidence that communication can reduce efficiency in competitive coordination games. This contrasts sharply with experimental findings from public goods and other coordination games, where communication enhances efficiency and often leads to socially optimal outcomes.
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Bibliographic InfoPaper provided by McMaster University in its series Department of Economics Working Papers with number 2009-09.
Length: 32 pages
Date of creation: Sep 2009
Date of revision:
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Contest; Between-group Competition; Within-group Competition; Cooperation; Coordination; Free-riding; Experiments;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
- NEP-CBE-2009-09-26 (Cognitive & Behavioural Economics)
- NEP-COM-2009-09-26 (Industrial Competition)
- NEP-EXP-2009-09-26 (Experimental Economics)
- NEP-GTH-2009-09-26 (Game Theory)
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- Neil J. Buckley & Stuart Mestelman & R. Andrew Muller & Stephan Schott & Jingjing Zhang, 2010.
"Effort provision and communication in teams competing over the commons,"
IEW - Working Papers
503, Institute for Empirical Research in Economics - University of Zurich.
- Neil J. Buckley & Stuart Mestelman & R. Andrew Muller & Stephan Schott & Jingjing Zhang, 2010. "Effort Provision and Communication in Teams Competing over the Commons," Department of Economics Working Papers 2010-07, McMaster University.
- Jingjing Zhang, 2012. "Communication in asymmetric group competition over public goods," ECON - Working Papers 069, Department of Economics - University of Zurich.
- Neil J. Buckley & Stuart Mestelman & R. Andrew Muller & Stephan Schott & Jingjing Zhang, 2013. "Communication and Output Sharing in Common Pool Resource Environments," Department of Economics Working Papers 2013-06, McMaster University.
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