Vecon Lab Minimum Effort Coordination Experiment: Introduction

This program sets up a game in which each person chooses an "effort". Players are matched in groups of a specified size, and the payoff for each person is the minimum effort made by all people in their group. There is a cost of effort, which is a constant amount per unit of their own effort. This is called a "coordination game" since any common effort is a Nash equilibrium as long as the unit cost is less than the value of an effort increment. The program also offers options to let players engage in "real effort" tasks, like looking up phone numbers, and then having the production for each person be entered by the experimenter at the end of a round. Macroeconomists have been fascinated by coordination games in which players may become mired in a "bad" equilibrium.

Class discussion can focus on the extent to which the outcome involves inefficiently low efforts, on equilibrium predictions, and on the intutition of why coordination is harder with high effort costs and large numbers of players.

Vecon Lab - October 20, 2014