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Leadership and overcoming coordination failure with asymmetric costs

Published online by Cambridge University Press:  14 March 2025

Jordi Brandts ,
David J. Cooper  and
Enrique Fatas
Jordi Brandts*
Affiliation:
Institut d'Anàlisi Econòmica, CSIC Campus UAB, 08193 Barcelona, Spain
David J. Cooper*
Affiliation:
Department of Economics, Florida State University, Tallahassee, FL 32306-2180, USA
Enrique Fatas*
Affiliation:
LINEEX, Facultad de Economía, Campus Tarongers, Universidad de Valencia, 46022 Valencia, Spain
*
e-mail: [email protected]
e-mail: [email protected]
e-mail: [email protected]
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Abstract

We study how the heterogeneity of agents affects the extent to which changes in financial incentives can pull a group out of a situation of coordination failure. We focus on the connections between cost asymmetries and leadership. Experimental subjects interact in groups of four in a series of weak-link games. The treatment variable is the distribution of high and low effort cost across subjects. We present data for one, two and three low-cost subjects as well as control sessions with symmetric costs. The overall pattern of coordination improvement is common across treatments. Early coordination improvements depend on the distribution of high and low effort costs across subjects, but these differences disappear with time. We find that initial leadership in overcoming coordination failure is not driven by low-cost subjects but by subjects with the most common cost type. This conformity effect may be due to a kind of group identity or to the cognitive simplicity of acting with identical others.

Keywords

ExperimentsCoordinationOrganizational changeHeterogeneous agentsLeadership

JEL classification

D63: Equity, Justice, Inequality, and Other Normative Criteria and Measurement D64: Altruism • Philanthropy • Intergenerational Transfers C90: General C70: General
Type
Research Article
Information
Experimental Economics , Volume 10 , Issue 3: Special issue of Experimental Economics in honor of Raymond C. Battalio: Coordination Games , September 2007 , pp. 269 - 284
Copyright
Copyright © 2007 Economic Science Association

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