IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Efficiency Gains from Team-Based Coordination—Large-Scale Experimental Evidence

  • Francesco Feri
  • Bernd Irlenbusch
  • Matthias Sutter

The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision making so far. In reality, however, teams often have to coordinate with other teams. We present a series of coordination experiments with a total of 1,101 participants. We find that teams of three subjects each coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model. (JEL C71, C91, D23, D83, M54 )

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.4.1892
Download Restriction: no

File URL: http://www.aeaweb.org/aer/data/sept2010/20081027_data.zip
Download Restriction: no

File URL: http://www.aeaweb.org/aer/data/sept2010/20081027_app.pdf
Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 100 (2010)
Issue (Month): 4 (September)
Pages: 1892-1912

as
in new window

Handle: RePEc:aea:aecrev:v:100:y:2010:i:4:p:1892-1912
Note: DOI: 10.1257/aer.100.4.1892
Contact details of provider: Web page: https://www.aeaweb.org/aer/
Email:


More information through EDIRC

Order Information: Web: https://www.aeaweb.org/subscribe.html

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Jordi Brandts & David J. Cooper, 2004. "Observability and Overcoming Coordination Failure in Organizations. An Experimental Study," Working Papers 143, Barcelona Graduate School of Economics.
  2. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, June.
  3. 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.
  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. Martin G. Kocher & Matthias Sutter, 2005. "The Decision Maker Matters: Individual Versus Group Behaviour in Experimental Beauty-Contest Games," Economic Journal, Royal Economic Society, vol. 115(500), pages 200-223, 01.
  6. Charness, Gary & Jackson, Matthew O., 2009. "The role of responsibility in strategic risk-taking," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 241-247, March.
  7. 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.
  8. Charness, Gary, 2000. "Self-Serving Cheap Talk: A Test Of Aumann's Conjecture," Games and Economic Behavior, Elsevier, vol. 33(2), pages 177-194, November.
  9. Charness, Gary & Jackson, Matthew O., 2007. "Group play in games and the role of consent in network formation," Journal of Economic Theory, Elsevier, vol. 136(1), pages 417-445, September.
  10. Crawford, Vincent & Broseta, Bruno, 1998. "What Price Coordination? The Efficiency-Enhancing Effect of Auctioning the Right to Play," American Economic Review, American Economic Association, vol. 88(1), pages 198-225, March.
  11. Maria Giovanna Devetag, 2002. "Coordination and information in critical mass games: an experimental study," CEEL Working Papers 0214, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  12. Knez, Marc & Simester, Duncan, 2001. "Firm-Wide Incentives and Mutual Monitoring at Continental Airlines," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 743-72, October.
  13. Kugler, Tamar & Bornstein, Gary & Kocher, Martin G. & Sutter, Matthias, 2007. "Trust between individuals and groups: Groups are less trusting than individuals but just as trustworthy," Munich Reprints in Economics 18202, University of Munich, Department of Economics.
  14. Gary Bornstein & Ilan Yaniv, 1998. "Individual and Group Behavior in the Ultimatum Game: Are Groups More “Rational†Players?," Experimental Economics, Springer, vol. 1(1), pages 101-108, June.
  15. Crawford, Vincent P., 1991. "An "evolutionary" interpretation of Van Huyck, Battalio, and Beil's experimental results on coordination," Games and Economic Behavior, Elsevier, vol. 3(1), pages 25-59, February.
  16. Ronald Bosman & Heike Hennig-Schmidt & Frans Winden, 2006. "Exploring group decision making in a power-to-take experiment," Experimental Economics, Springer, vol. 9(1), pages 35-51, April.
  17. Tilman Slembeck & Jean-Robert Tyran, 2002. "Do Institutions Promote Rationality? An Experimental Study of the Three-Door Anomaly," University of St. Gallen Department of Economics working paper series 2002 2002-21, Department of Economics, University of St. Gallen.
  18. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
  19. Frank Heinemann & Rosemarie Nagel & Peter Ockenfels, 2004. "The Theory of Global Games on Test: Experimental Analysis of Coordination Games with Public and Private Information," Econometrica, Econometric Society, vol. 72(5), pages 1583-1599, 09.
  20. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June.
  21. Berninghaus, Siegfried K. & Ehrhart, Karl-Martin, 1998. "Time horizon and equilibrium selection in tacit coordination games: Experimental results," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 231-248, October.
  22. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1991. "Strategic Uncertainty, Equilibrium Selection, and Coordination Failure in Average Opinion Games," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 885-910, August.
  23. COOPER, R. & DEJONG, D.V. & FORSYTHE, R. & Tom Ross, 1989. "Communication In Coordination Games," Carleton Industrial Organization Research Unit (CIORU) 89-07, Carleton University, Department of Economics.
  24. 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.
  25. Blinder, Alan S & Morgan, John, 2005. "Are Two Heads Better than One? Monetary Policy by Committee," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(5), pages 789-811, October.
  26. Manzini, P. & Sadrieh, A. & Vriend, N.J., 2002. "On Smiles, Winks, and Handshakes as Coordination Devices," Discussion Paper 2002-40, Tilburg University, Center for Economic Research.
  27. Giovanna Devetag & Andreas Ortmann, 2006. "When and Why? A Critical Survey on Coordination Failure in the Laboratory," CEEL Working Papers 0605, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  28. Rydval, Ondrej & Ortmann, Andreas, 2005. "Loss avoidance as selection principle: Evidence from simple stag-hunt games," Economics Letters, Elsevier, vol. 88(1), pages 101-107, July.
  29. Ho, Teck H. & Camerer, Colin F. & Chong, Juin-Kuan, 2007. "Self-tuning experience weighted attraction learning in games," Journal of Economic Theory, Elsevier, vol. 133(1), pages 177-198, March.
  30. Cooper, Russell, et al, 1990. "Selection Criteria in Coordination Games: Some Experimental Results," American Economic Review, American Economic Association, vol. 80(1), pages 218-33, March.
  31. Gary Charness & Edi Karni & Dan Levin, 2007. "Individual and group decision making under risk: An experimental study of Bayesian updating and violations of first-order stochastic dominance," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 129-148, October.
  32. Cason, Timothy N & Mui, Vai-Lam, 1997. "A Laboratory Study of Group Polarisation in the Team Dictator Game," Economic Journal, Royal Economic Society, vol. 107(444), pages 1465-83, September.
  33. Schmidt, David & Shupp, Robert & Walker, James M. & Ostrom, Elinor, 2003. "Playing safe in coordination games:: the roles of risk dominance, payoff dominance, and history of play," Games and Economic Behavior, Elsevier, vol. 42(2), pages 281-299, February.
  34. TeckH. Ho & Xin Wang & ColinF. Camerer, 2008. "Individual Differences in EWA Learning with Partial Payoff Information," Economic Journal, Royal Economic Society, vol. 118(525), pages 37-59, 01.
  35. Jordi Brandts & David J. Cooper, 2004. "Observability and Overcoming Coordination Failure in Organizations," UFAE and IAE Working Papers 630.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  36. V. Crawford, 2010. "Adaptive Dynamics in Coordination Games," Levine's Working Paper Archive 404, David K. Levine.
  37. Nick Feltovich, 2003. "Nonparametric Tests of Differences in Medians: Comparison of the Wilcoxon–Mann–Whitney and Robust Rank-Order Tests," Experimental Economics, Springer, vol. 6(3), pages 273-297, November.
  38. 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.
  39. Gary Bornstein & Tamar Kugler & Anthony Ziegelmeyer, 2002. "Individual and Group Decisions in the Centipede Game: Are Groups More “Rational” Players?," Discussion Paper Series dp298, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  40. Van Huyck John B. & Battalio Raymond C. & Beil Richard O., 1993. "Asset Markets as an Equilibrium Selection Mechanism: Coordination Failure, Game Form Auctions, and Tacit Communication," Games and Economic Behavior, Elsevier, vol. 5(3), pages 485-504, July.
  41. Ho, Teck-Hua & Camerer, Colin F. & Chong, Juin-Kuan, 2001. "Economic Value of EWA Lite: A Functional Theory of Learning in Games," Working Papers 1122, California Institute of Technology, Division of the Humanities and Social Sciences.
  42. Wolfgang Luhan & Martin Kocher & Matthias Sutter, 2009. "Group polarization in the team dictator game reconsidered," Experimental Economics, Springer, vol. 12(1), pages 26-41, March.
  43. Goeree, Jacob K. & Holt, Charles A., 2005. "An experimental study of costly coordination," Games and Economic Behavior, Elsevier, vol. 51(2), pages 349-364, May.
  44. John Duffy & Nick Feltovich, 2006. "Words, Deeds, and Lies: Strategic Behaviour in Games with Multiple Signals," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 669-688.
  45. Tom Ross & Russell Cooper & Douglas V. DeJong & Robert Forsythe, 1987. "Selection Criteria in Coordination Games: Some Experimental Results," Carleton Industrial Organization Research Unit (CIORU) 87-04, Carleton University, Department of Economics.
  46. Duffy, John & Feltovich, Nick, 2002. "Do Actions Speak Louder Than Words? An Experimental Comparison of Observation and Cheap Talk," Games and Economic Behavior, Elsevier, vol. 39(1), pages 1-27, April.
  47. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  48. Van Huyck, John B. & Cook, Joseph P. & Battalio, Raymond C., 1997. "Adaptive behavior and coordination failure," Journal of Economic Behavior & Organization, Elsevier, vol. 32(4), pages 483-503, April.
  49. Vincent P. Crawford & Uri Gneezy & Yuval Rottenstreich, 2008. "The Power of Focal Points Is Limited: Even Minute Payoff Asymmetry May Yield Large Coordination Failures," American Economic Review, American Economic Association, vol. 98(4), pages 1443-58, September.
  50. Cooper, Russell, et al, 1992. "Communication in Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 739-71, May.
  51. John Hamman & Scott Rick & Roberto Weber, 2007. "Solving coordination failure with “all-or-none” group-level incentives," Experimental Economics, Springer, vol. 10(3), pages 285-303, September.
  52. Cachon, Gerard P & Camerer, Colin F, 1996. "Loss-Avoidance and Forward Induction in Experimental Coordination Games," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 165-94, February.
  53. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  54. Gary Charness & Luca Rigotti & Aldo Rustichini, 2007. "Individual Behavior and Group Membership," American Economic Review, American Economic Association, vol. 97(4), pages 1340-1352, September.
Full references (including those not matched with items on IDEAS)

This item is featured on the following reading lists or Wikipedia pages:

  1. Efficiency Gains from Team-Based Coordination—Large-Scale Experimental Evidence (AER 2010) in ReplicationWiki

When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:100:y:2010:i:4:p:1892-1912. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)

or (Michael P. Albert)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.