Can We Think Locally, Act Globally? Understanding When Local Information Can Facilitate Global Coordination

Abstract

In this paper we focus on a neglected aspect of common pool resource problems – whether or not actors in a group can find a solution to the underlying coordination issue. Using a simple networked model of coordination we demonstrate that coordination problems are very difficult to solve when there are few solutions and actors possess local information. However, if the number of solutions does not change, then increases in the number of connections in the network can make coordination more likely to occur. These results suggest connections can influence the ability to reach solutions in two different ways. First, if connections reduce the number of solutions to a problem, then coordination may be less likely. Second, if it is possible to build connections between actors without reducing the number of solutions, then these connections facilitate coordination. These insights can help shed light on how institutions may facilitate international policy coordination.

Keywords: coordination, collective action, experiments, networks

JEL Classification: C92