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Comparative statics of the minimum-effort coordination game

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Authors
Myung, Noah
Romero, Julian
Subjects
coordination game
comparative statics
experiments
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Date of Issue
2013-08-09
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Monterey, California, Naval Postgraduate School
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Abstract
We focus on the effects of changing costs of effort in the minimum-effort coordination game. We find three main results. First, as the cost of effort increases, the level of effort decreases. Second, as the cost of effort increases, the convergence speed to an equilibrium also increase. Third, the overall efficiency (average payoff) does not monotonically decrease as the cost of effort increases. Average payoff decreases for the most part but actually increases when the cost of effort is very high. Even though groups are converging towards worse equilibria as the cost increases, they are converging faster, and therefore lose less due to fewer periods of non-coordination. This non-monotonicity in the average payoff suggests that individuals may be better off with higher costs of effort.
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Working Paper
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Graduate School of Business & Public Policy (GSBPP)
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.
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