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Communication in Asymmetric Group Competition over Public Goods

  • Jingjing Zhang
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    This paper examines whether and how communication can help groups solve coordination and free-rider problems when they compete with another group for a public-good prize. We find that when group members make an anonymous individual decision on whether or not to contribute to the group success, within-group cheap talk communication significantly reduces miscoordination and free-riding. To measure how much miscoordination remains when communication is allowed, we employ a control treatment where we remove coordination and free-riding incentives by having group members reach a unanimous group decision on how much to contribute. We find that group level contributions are not significantly different in the two cases. Communication therefore completely eliminates miscoordination and free-riding within groups and leads group members to act as one agent in making decisions. Content analysis of group communication reveals that groups explicitly designate specific contributors following a rotation scheme and they understand the essence of implementing mixed strategy equilibrium.

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    File URL: http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2009-06.pdf
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    Paper provided by McMaster University in its series Department of Economics Working Papers with number 2009-06.

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    Length: 40 pages
    Date of creation: Sep 2009
    Date of revision:
    Handle: RePEc:mcm:deptwp:2009-06
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