Journal article
Observability and overcoming coordination failure in organizations: An experimental study
Experimental economics : a journal of the Economic Science Association, Vol.9(4), pp.407-423
12/01/2006
DOI: 10.1007/s10683-006-7056-5
Abstract
Motivated by problems of coordination failure in organizations, we examine how overcoming coordination failure and maintaining coordination depend on the ability of individuals to observe others' choices. Subjects' payoffs depend on coordinating at high effort levels in a weak-link game. Treatments vary along two dimensions. First, subjects either start with low financial incentives for coordination, which typically leads to coordination failure, and then are switched to higher incentives or start with high incentives, which usually yield effective coordination, and are switched to low incentives. Second, as the key treatment variable, subjects either observe the effort levels chosen by all individuals in their experimental group (full feedback) or observe only the minimum effort (limited feedback). We find three primary results: (1) When starting from coordination failure the use of full feedback improves subjects' ability to overcome coordination failure, (2) When starting with good coordination the use of full feedback has no effect on subjects' ability to avoid slipping into coordination failure, and (3) History-dependence, defined as dependence of current effort levels on past incentives, is strengthened by the use of full feedback.
Details
- Title: Subtitle
- Observability and overcoming coordination failure in organizations: An experimental study
- Creators
- Jordi Brandts - Institut d'Anàlisi EconòmicaDavid J. Cooper
- Resource Type
- Journal article
- Publication Details
- Experimental economics : a journal of the Economic Science Association, Vol.9(4), pp.407-423
- Publisher
- Springer Nature
- DOI
- 10.1007/s10683-006-7056-5
- ISSN
- 1386-4157
- eISSN
- 1573-6938
- Number of pages
- 17
- Language
- English
- Date published
- 12/01/2006
- Academic Unit
- Economics
- Record Identifier
- 9984420843902771
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