Punishment Fosters Efficiency in the Minimum Effort Coordination Game

@inproceedings{Lec2012PunishmentFE,
  title={Punishment Fosters Efficiency in the Minimum Effort Coordination Game},
  author={Fabrice Le Lec and Astrid Matthey and Ondřej Rydval},
  year={2012}
}
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… CONTINUE READING