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Stand by Me—Experiments on Help and Commitment in Coordination Games

Author

Listed:
  • Jordi Brandts

    (Institut d’Anàlisi Econòmica, 08193 Bellaterra, Spain; and Barcelona Graduate School of Economics, 08005 Barcelona, Spain)

  • David J. Cooper

    (Department of Economics, Florida State University, Tallahassee, Florida 32306; and School of Economics, University of East Anglia, Norwich NR4 7TJ, United Kingdom)

  • Enrique Fatas

    (School of Economics, University of East Anglia, Norwich NR4 7TJ, United Kingdom)

  • Shi Qi

    (Department of Economics, Florida State University, Tallahassee, Florida 32306)

Abstract

We present experiments studying how high-ability individuals use help to foster efficient coordination. After an initial phase that traps groups in a low-productivity equilibrium, incentives to coordinate are increased, making it possible to escape this performance trap. The design varies whether high-ability individuals can offer help and, if so, whether they must commit to help for an extended period. If help is chosen on a round-by-round basis, the probability of escaping the performance trap is slightly reduced by allowing for help. The likelihood of success significantly improves if high-ability individuals must commit to help for an extended time. We develop and estimate a structural model of sophisticated learning that provides an explanation for why commitment is necessary. The key insight is that potential leaders who are overly optimistic about their ability to teach their followers are too fast to eliminate help in the absence of commitment.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2269 . This paper was accepted by Teck-Hua Ho, behavioral economics .

Suggested Citation

  • Jordi Brandts & David J. Cooper & Enrique Fatas & Shi Qi, 2016. "Stand by Me—Experiments on Help and Commitment in Coordination Games," Management Science, INFORMS, vol. 62(10), pages 2916-2936, October.
  • Handle: RePEc:inm:ormnsc:v:62:y:2016:i:10:p:2916-2936
    DOI: 10.1287/mnsc.2015.2269
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    References listed on IDEAS

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    2. Masiliūnas, Aidas, 2019. "Overcoming inefficient lock-in in coordination games with sophisticated and myopic players," Mathematical Social Sciences, Elsevier, vol. 100(C), pages 1-12.
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    4. Heggedal, Tom-Reiel & Helland, Leif & Neset Joslin, Knut-Eric, 2018. "Should I Stay or should I Go? Bandwagons in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 86-97.

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