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Communication in asymmetric group competition over public goods

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  • Jingjing Zhang

Abstract

This paper examines whether and how cheap talk communication can facilitate within-group coordination when two unequal sized groups compete for a prize that is shared equally among members of the winning group, regardless of their (costly) contributions to the group’s success. We find that allowing group members to communicate before making contribution decisions improves coordination. To measure how much miscoordination remains, we employ a control treatment where miscoordination is eliminated by asking group members to reach a unanimous contribution decision. Average group contributions are not significantly different in this control treatment. Cheap talk communication thus completely solves miscoordination within groups and makes group members act as a single agent. Furthermore, it is the larger group that benefits from communication at the expense of the smaller group. Finally, content analysis of group communication reveals that after the reduction of within-group strategic uncertainty, groups reach self-enforcing agreements on how much to contribute, designate specific contributors according to a rotation scheme, and quickly discover the logic of the mixed-strategy equilibrium.

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Bibliographic Info

Paper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 069.

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Date of creation: Apr 2012
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Handle: RePEc:zur:econwp:069

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Keywords: Group competition; threshold public goods; coordination; cheap talk communication; content analysis; experiments;

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References

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Citations

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Cited by:
  1. Jingjing Zhang, 2009. "Communication in Asymmetric Group Competition over Public Goods," Department of Economics Working Papers 2009-06, McMaster University.
  2. Roman M. Sheremeta & Jingjing Zhang, 2013. "Three-Player Trust Game with Insider Communication," Working Papers 13-03, Chapman University, Economic Science Institute.
  3. Timothy N. Cason & Roman M. Sheremeta & Jingjing Zhang, 2010. "Communication and efficiency in competitive coordination games," IEW - Working Papers 505, Institute for Empirical Research in Economics - University of Zurich, revised Feb 2012.
  4. 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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