Report Title: One Step at a Time: Does Gradualism Build Coordination?
Reporter(Institution): Maoliang Ye, Hanqing Advanced Institute of Economics and Finance, Renmin University of China
Time: 02:00.pm,16th October, 2013
Location: B-201, Building of Economics & Management, Jiulonghu Campus
Abstract: This paper studies a potential mechanism to promote coordination. With the theoretical guidance via a belief-based learning framework with level-k thinking, we conduct a multiple-period binary-choice weakest-link coordination experiment in the lab to study how gradualism – increasing required levels (“stakes”) of contributions slowly over time rather than requiring a high level of contribution immediately – affects group coordination performances on high-stake projects. We randomly assign subjects to three treatments: starting and continuing at a high stake, starting at a low stake but jumping to a high stake after a few periods, and starting at a low stake and gradually increasing the stake over time (the “gradualism” treatment). We find that groups coordinate most successfully at the high stake in the gradualism treatment relative to the other two treatments. Our findings point to a simple mechanism to promote successful voluntary coordination when other mechanisms such as communications and information feedback are absent or limited.
