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Competition as a coordination device: Experimental evidence from a minimum effort coordination game

  • Riechmann, Thomas
  • Weimann, Joachim

This paper presents a means of fostering efficient coordination in minimum effort coordination games, inter-group competition. In a series of laboratory experiments, we reveal that the true reason for coordination failure is strategic uncertainty, which can be reduced almost completely by introducing an appropriately designed mechanism of (inter-group) competition. We uncover the reasons why competition works as a coordination device and how the mechanism of competition should be designed in order to achieve a maximum degree of efficiency.

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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 24 (2008)
Issue (Month): 2 (June)
Pages: 437-454

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Handle: RePEc:eee:poleco:v:24:y:2008:i:2:p:437-454
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