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Highly flexible neighborhood promotes efficient coordination: Experimental evidence

Author

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  • Riyanto, Yohanes E.
  • Teh, Tat-How
Abstract
We experimentally investigate group effort-coordination games where individuals are occasionally offered opportunities to alter their interaction neighborhood (with whom they want to connect and interact). We vary the neighborhood flexibility, or the rate with which such opportunities arise. We find that increasing neighborhood flexibility significantly improves coordination efficiency when players start with a decentralized circle-shaped network, but the improvement is limited if they start with a highly centralized star-shaped network. Neighborhood flexibility improves coordination through facilitating assortative matching among high-effort players. In star-shaped networks, neighborhood flexibility has a side-effect of decentralizing the networks which weakens the central player’s ability in facilitating coordination hence partially offsets the benefit from assortative matching.

Suggested Citation

  • Riyanto, Yohanes E. & Teh, Tat-How, 2020. "Highly flexible neighborhood promotes efficient coordination: Experimental evidence," European Economic Review, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:eecrev:v:129:y:2020:i:c:s0014292120301525
    DOI: 10.1016/j.euroecorev.2020.103521
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    References listed on IDEAS

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    Cited by:

    1. Lu, Feifei & Shi, Fei, 2023. "Coordination with heterogeneous interaction constraints," Games and Economic Behavior, Elsevier, vol. 142(C), pages 645-665.
    2. Edoardo Gallo & Yohanes E. Riyanto & Nilanjan Roy & Tat-How Teh, 2022. "Cooperation and punishment mechanisms in uncertain and dynamic networks," Papers 2203.04001, arXiv.org.
    3. Gallo, Edoardo & Riyanto, Yohanes E. & Roy, Nilanjan & Teh, Tat-How, 2022. "Cooperation and punishment mechanisms in uncertain and dynamic social networks," Games and Economic Behavior, Elsevier, vol. 134(C), pages 75-103.

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    More about this item

    Keywords

    Efficient coordination; Centralization; Average effort; Neighborhood choice; Social network;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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