Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70169
Authors: 
Le Lec, Fabrice
Matthey, Astrid
Rydval, Ondérej
Year of Publication: 
2012
Series/Report no.: 
Jena Economic Research Papers 2012,030
Abstract: 
Using a laboratory experiment, we examine whether informal monetary sanctions can lead to better coordination in a repeated minimum effort coordination game. While most groups first experience inefficient coordination, the efficiency increases substantially after introducing an ex post sanctioning possibility. Namely, subjects can assign punishment points to other group members upon observing their efforts, which is costly for the punisher but twice as costly for the punished member. By contrast, introducing instead an ex post costless communication possibility fails to permanently increase efficiency. This suggests that decentralized monetary sanctions can play a major role as a coordination device in Pareto-ranked coordination settings, such as teamwork in firms and other organizational contexts.
Subjects: 
coordination
minimum effort
order-statistic game
punishment
sanction
weakest link
JEL: 
C72
C91
D01
D03
Document Type: 
Working Paper

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