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One Step at a Time: Does Gradualism Build Coordination?

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  • Maoliang Ye

    (Faculty of Economics and Business Administration, Southern University of Science and Technology, 518055 Shenzhen, China; Department of Public Finance, School of Economics, Wang Yanan Institute for Studies in Economics, MOE Key Laboratory of Econometrics, Xiamen University, 361005 Xiamen, China;)

  • Jie Zheng

    (Department of Economics, School of Economics and Management, Tsinghua University, 100084 Beijing, China;)

  • Plamen Nikolov

    (Department of Economics, State University of New York, Binghamton, New York 13902;)

  • Sam Asher

    (School of Advanced International Studies, Johns Hopkins University, Washington, District of Columbia 20036)

Abstract

This study investigates a potential mechanism to promote coordination. With theoretical guidance using a belief-based learning model, we conduct a multiperiod, binary-choice, and weakest-link laboratory coordination experiment to study the effect of gradualism—increasing the required levels (stakes) of contributions slowly over time rather than requiring a high level of contribution immediately—on group coordination performance. We randomly assign subjects to three treatments: starting and continuing at a high stake, starting at a low stake but jumping to a high stake after a few periods, and starting at a low stake while gradually increasing the stakes over time (the Gradualism treatment). We find that relative to the other two treatments, groups coordinate most successfully at high stakes in the Gradualism treatment. We also find evidence that supports the belief-based learning model. These findings point to a simple mechanism for promoting successful voluntary coordination.

Suggested Citation

  • Maoliang Ye & Jie Zheng & Plamen Nikolov & Sam Asher, 2020. "One Step at a Time: Does Gradualism Build Coordination?," Management Science, INFORMS, vol. 66(1), pages 113-129, January.
  • Handle: RePEc:inm:ormnsc:v:66:y:2020:i:1:p:113-129
    DOI: 10.1287/mnsc.2018.3210
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    3. Chun‐Lei Yang & Mao‐Long Xu & Juanjuan Meng & Fang‐Fang Tang, 2017. "Efficient Large‐Size Coordination Via Voluntary Group Formation: An Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(2), pages 651-668, May.
    4. Bao, Te & Zong, Jichuan, 2019. "The impact of interest rate policy on individual expectations and asset bubbles in experimental markets," Journal of Economic Dynamics and Control, Elsevier, vol. 107(C), pages 1-1.
    5. Yoshio Kamijo & Hiroki Ozono & Kazumi Shimizu, 2014. "A Mechanism That Overcomes Coordination Failure Based on Gradualism, Endogeneity, and Modification," Working Papers 1401, Waseda University, Faculty of Political Science and Economics.
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    7. Yoshio Kamijo & Hiroki Ozono & Kazumi Shimizu, 2015. "A mechanism overcoming coordination failure based on gradualism and endogeneity," Working Papers SDES-2015-11, Kochi University of Technology, School of Economics and Management, revised Jan 2015.
    8. Gallier, Carlo & Sturm, Bodo, 2021. "The ratchet effect in social dilemmas," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 251-268.
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    17. Cooper, David J. & Ioannou, Christos A. & Qi, Shi, 2018. "Endogenous incentive contracts and efficient coordination," Games and Economic Behavior, Elsevier, vol. 112(C), pages 78-97.
    18. Yoshio Kamijo & Hiroki Ozono & Kazumi Shimizu, 2016. "Overcoming coordination failure using a mechanism based on gradualism and endogeneity," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 202-217, March.
    19. Sandra Polania-Reyes, 2016. "Disentangling Social Capital: Lab-in-the-Field Evidence on Coordination, Networks, and Cooperation," Artefactual Field Experiments 00565, The Field Experiments Website.
    20. Yin, Xile & Li, Jianbiao & Bao, Te, 2019. "Does overconfidence promote cooperation? Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 119-133.

    More about this item

    Keywords

    gradualism; coordination; laboratory experiment; belief-based learning;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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