Government Intervention and Collective Action: Induced Interaction Can Build Coordination

52 Pages Posted: 3 Jul 2023

Abstract

Using a minimum effort game at the onset of a conditional cash transfer in Colombia, we document that increasing exposure time to the intervention is associated with a higher (lower) probability of beneficiaries choosing high (low) effort. We argue that program-induced links between beneficiaries gives rise to a coordination device, which is not mediated by kinship or friendship. Willingness to cooperate does not drive coordination, so the program-induced interaction affects individual expectations and not players’ preferences. However, structural estimates about the level of expectations needed to sustain high effort raise a word of caution about the long-run effect of the intervention.

Keywords: coordination, conditional cash transfer, quantal response equilibrium, level-k, lab-in-the-field, induced interaction

Suggested Citation

Echeverry, David and Polania-Reyes, Sandra, Government Intervention and Collective Action: Induced Interaction Can Build Coordination. Available at SSRN: https://ssrn.com/abstract=4499175 or http://dx.doi.org/10.2139/ssrn.4499175

David Echeverry (Contact Author)

University of Navarra ( email )

Calle Universidad 1
Pamplona, Navarra 31180
Spain
682544576 (Phone)
31180 (Fax)

HOME PAGE: http://https://decheverry.github.io

Sandra Polania-Reyes

University of Navarra ( email )

Universidad de Navarra
Campus Universitario
Pamplona, 31009
Spain

HOME PAGE: http://https://spolaniareyes.github.io/

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