Managing Growth to Achieve Efficient Coordination in Large Groups

Carnegie Mellon Behavioral Decision Research Working Paper

37 Pages Posted: 12 Nov 2002

See all articles by Roberto A. Weber

Roberto A. Weber

University of Zurich - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 8, 2002

Abstract

Several previous experiments using the minimum effort (weak link) coordination game reveal a striking regularity - large groups never coordinate successfully on the efficient equilibrium. Given the frequency with which large real-world groups, such as firms, face similarly difficult coordination problems, this poses an important question for economics and organization: Why do we observe large successfully coordinated groups of people in the real world when they are so difficult to create in the laboratory? This paper presents one reason. The experiments show that, even though efficient coordination does not occur in groups that start off large, efficiently coordinated large groups can be "grown." By starting with small groups that find it easier to coordinate, we can add people at a sufficiently slow rate to create efficiently coordinated large groups. This represents the first experimental demonstration of large groups regularly coordinated at high levels of efficiency.

Keywords: coordination, minimum effort game, growth, experiments

JEL Classification: C72, C92, L25

Suggested Citation

Weber, Roberto A., Managing Growth to Achieve Efficient Coordination in Large Groups (August 8, 2002). Carnegie Mellon Behavioral Decision Research Working Paper, Available at SSRN: https://ssrn.com/abstract=323225 or http://dx.doi.org/10.2139/ssrn.323225

Roberto A. Weber (Contact Author)

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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