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Overcoming coordination failure using a mechanism based on gradualism and endogeneity

Published online by Cambridge University Press:  14 March 2025

Yoshio Kamijo ,
Hiroki Ozono  and
Kazumi Shimizu
Yoshio Kamijo*
Affiliation:
School of Management, Kochi University of Technology, Kami, Japan
Hiroki Ozono
Affiliation:
Economic and Humanities, Kagoshima University, Kagoshima, Japan
Kazumi Shimizu
Affiliation:
School of Political Science and Economics, Waseda University, Tokyo, Japan
*
yoshio.kamijo@gmail.com
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Abstract

We examine three tools that can enhance coordination success in a repeated multiple-choice coordination game. Gradualism means that the game starts as an easy coordination problem and moves gradually to a more difficult one. The Endogenous Ascending mechanism implies that a gradual increase in the upper bound of coordination occurs only if coordination with the Pareto superior equilibrium in a stage game is attained. The Endogenous Descending mechanism requires that when the game’s participants fail to coordinate, the level of the next coordination game be adjusted such that the game becomes simpler. We show that gradualism may not always work, but in such instances, its effect can be reinforced by endogeneity. Our laboratory experiment provides evidence that a mechanism that combines three tools, herein termed the “Gradualism with Endogenous Ascending and Descending (GEAD)” mechanism, works well. We discuss how the GEAD mechanism can be applied to real-life situations that suffer from coordination failure.

Keywords

Coordination failureMinimum effort coordination gameLaboratory experimentTarget adjustmentGradualismEndogenous ascendingEndogenous descending

JEL classification

C91: Laboratory, Individual Behavior C92: Laboratory, Group Behavior M54: Labor Management C72: Noncooperative Games
Type
Original Paper
Information
Experimental Economics , Volume 19 , Issue 1 , March 2016 , pp. 202 - 217
Copyright
Copyright © 2015 Economic Science Association

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