The minimum effort game (also called weakest link game) is a multi-equilibria coordination game where the ranking of equilibria according to payoff dominance (Pareto ranking) is contrary to the ranking yielded by risk dominance. A very stable experimental result is that larger groups in repeated play are not able to coordinate on the payoff-dominant equilibrium but move towards the risk-dominant equilibrium in. Various setups have been tried to trigger coordination on high-payoff equilibria. Most of them were successful but with all of them efficient coordination remained fragile. We conduct an experiment where the minimum effort game is embedded in a game of network formation. The possible exclusion of others from the own neighborhood provides a powerful mean to achieve maximum effort in the minimum effort game. The results remain stable even in very large groups (of 24 subjects). (With Arno Riedl and Ingrid M.T. Rohde)
- Speaker(s)
- Martin Strobel (University of Maastricht)
- Date
- 2010-05-28
- Location
- Amsterdam