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Overcoming coordination failure using a mechanism based on gradualism and endogeneity

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  • Yoshio Kamijo

    () (Kochi University of Technology)

  • Hiroki Ozono

    (Kagoshima University)

  • Kazumi Shimizu

    (Waseda University)

Abstract

Abstract We examine three tools that can enhance coordination success in a repeated multiple-choice coordination game. Gradualism means that the game starts as an easy coordination problem and moves gradually to a more difficult one. The Endogenous Ascending mechanism implies that a gradual increase in the upper bound of coordination occurs only if coordination with the Pareto superior equilibrium in a stage game is attained. The Endogenous Descending mechanism requires that when the game’s participants fail to coordinate, the level of the next coordination game be adjusted such that the game becomes simpler. We show that gradualism may not always work, but in such instances, its effect can be reinforced by endogeneity. Our laboratory experiment provides evidence that a mechanism that combines three tools, herein termed the “Gradualism with Endogenous Ascending and Descending (GEAD)” mechanism, works well. We discuss how the GEAD mechanism can be applied to real-life situations that suffer from coordination failure.

Suggested Citation

  • 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.
  • Handle: RePEc:kap:expeco:v:19:y:2016:i:1:d:10.1007_s10683-015-9433-4 DOI: 10.1007/s10683-015-9433-4
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Aidas Masiliunas, 2016. "Inefficient Lock-in with Sophisticated and Myopic Players," Working Papers halshs-01304178, HAL.
    2. Hiroki Ozono & Yoshio Kamijo & Kazumi Shimizu, 2015. "Institutionalize reciprocity to overcome the public goods provision problem," Working Papers SDES-2015-19, Kochi University of Technology, School of Economics and Management, revised Jul 2015.
    3. Aidas Masiliunas, 2016. "Inefficient Lock-in with Sophisticated and Myopic Players," Working Papers halshs-01304178, HAL.
    4. Hiroki Ozono & Yoshio Kamijo & Kazumi Shimizu, "undated". "Does the order of punishment matter? A comparison of pool punishment systems," Working Papers 1707, Waseda University, Faculty of Political Science and Economics.
    5. Timko, Krisztina, 2017. "Men and Women Are Equally Effective Leaders," MPRA Paper 77022, University Library of Munich, Germany.
    6. Hiroki Ozono & Yoshio Kamijo & Kazumi Shimizu, 2015. "Institutionalize reciprocity to overcome the public goods provision problem," Working Papers SDES-2015-19, Kochi University of Technology, School of Economics and Management, revised Jul 2015.

    More about this item

    Keywords

    Coordination failure; Minimum effort coordination game; Laboratory experiment; Target adjustment; Gradualism; Endogenous ascending; Endogenous descending;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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