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Improving Coordination and Cooperation Through Competition

Myung, Noah (2009) Improving Coordination and Cooperation Through Competition. Social Science Working Paper, California Institute of Technology , Pasadena, CA. (Unpublished)

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We use game theory and experimental economics approaches to analyze the relationships between corporate culture and the persistent performance differences among seemingly similar enterprises. First, we show that competition leads to higher minimum effort levels in the minimum effort coordination game. This implies that, organizations with competitive institutional design are more likely to have better coordination, hence better performance outcome. Furthermore, we show that organizations with better co- ordination also lead to higher rates of cooperation in the prisoner’s dilemma game. This supports the theory that the high-efficiency culture developed in coordination games act as a focal point for the outcome of subsequent prisoner’s dilemma game. In turn, we argue that these endogenous features of culture developed from coordination and cooperation can help explain the persistent performance differences.

Item Type:Report or Paper (Working Paper)
Additional Information:I owe many thanks to Charlie Plott, Jaksa Cvitanic, Colin Camerer, Joseph Wang, Matt Rabin, Tom Palfrey, Andrea Mattozzi, Federico Echenique and Eileen Chou for their helpful comments and discussions. The experiments were graciously funded by Charlie Plott. I am also grateful to seminar participants at Caltech, UMASS, Fordham University, Naval Postgraduate School, UCSD Rady, George Mason University IFREE, ESA North American Meeting and ESA International Meeting.
Group:Social Science Working Papers
Subject Keywords:Competition, Coordination game, Corporate Culture, Equilibrium Selection, Experiment, Organization, Prisoner’s Dilemma
Series Name:Social Science Working Paper
Classification Code:JEL: C72, C91, C92, D02, D23
Record Number:CaltechAUTHORS:20170727-140736706
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79501
Deposited By: Jacquelyn Bussone
Deposited On:02 Aug 2017 21:24
Last Modified:03 Oct 2019 18:20

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