Asymmetric and Endogenous Within-Group Communication in Competitive Coordination Games

40 Pages Posted: 7 Nov 2015 Last revised: 21 Feb 2017

See all articles by Timothy N. Cason

Timothy N. Cason

Purdue University - Krannert School of Management

Roman M. Sheremeta

Case Western Reserve University

Jingjing Zhang

University of Zurich - Department of Economics

Date Written: February 20, 2017

Abstract

Within-group communication in competitive coordination games has been shown to increase competition between groups and lower efficiency. This study further explores potentially harmful effects of communication, by addressing the questions of (i) asymmetric communication and (ii) the endogenous emergence of communication. Our theoretical analysis provides testable hypotheses regarding the effect of communication on competitive behavior and efficiency. We test these predictions using a laboratory experiment. The experiment shows that although asymmetric communication is not as harmful as symmetric communication, it leads to more aggressive competition and lower efficiency relative to the case when neither group can communicate. Moreover, groups vote to endogenously establish communication channels even though they would earn higher payoffs if jointly they chose to restrict within-group communication.

Keywords: between-group competition, within-group competition, communication, coordination, contests, experiments

JEL Classification: C70, D72, H41

Suggested Citation

Cason, Timothy N. and Sheremeta, Roman M. and Zhang, Jingjing, Asymmetric and Endogenous Within-Group Communication in Competitive Coordination Games (February 20, 2017). Available at SSRN: https://ssrn.com/abstract=2686851 or http://dx.doi.org/10.2139/ssrn.2686851

Timothy N. Cason

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States
765-494-1737 (Phone)

Roman M. Sheremeta (Contact Author)

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

Jingjing Zhang

University of Zurich - Department of Economics ( email )

Bl├╝mlisalpstrasse 10
Zurich, 8006
Switzerland

HOME PAGE: http://www.econ.uzh.ch/faculty/zhang.html

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