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Brandts, Jordi, and
David J. Cooper. 2006. "A Change Would Do You Good .... An Experimental Study on How to Overcome Coordination Failure in Organizations."
,
96(3): 669-693.
Show Article Details
DOI: 10.1257/aer.96.3.669
Abstract:We study how financial incentives can be used to overcome a history of coordination
failure using controlled laboratory experiments. Subjects' payoffs depend on coordinating
at high effort levels. In an initial phase, the benefits of coordination are
low, and play typically converges to an inefficient outcome. We then explore varying
financial incentives to coordinate at a higher effort level. An increase in the benefits
of coordination leads to improved coordination, but large increases have no more
impact than small increases. Once subjects have coordinated on a higher effort
level, reductions in the incentives to coordinate have little effect on behavior. (JEL
C92, D23, J31, L23, M52)
Additional links:
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Authors:
Brandts, Jordi
Cooper, David J.
JEL Classifications:
:
None
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