Motivation and Coordination Games: Experiencing Organizational Dynamics

Nicole Marie Bouchez

Game Theory
Industrial Organization

Non-computerized experiment

Both games are conducted in class and they have a short follow-up assignment that is announced after the game is finished. This assignment is meant to help the students understand what they have been doing and why the two games are different. In the coordination game, the students have a common interest (the equilibria are Pareto ranked, and one is efficient). The problem is aligning expectations (and actions). Generally, the students initially settle on an inefficient equilibrium. Direct communication between students allows students to achieve efficiency and move to the Pareto efficient equilibrium without the need for binding commitments. In contrast, in the motivation game, the players have a personal interest diametrically opposed to the common interest (a sort of multilateral prisoner's dilemma). By playing the game, students come to realize how difficult it can be to achieve cooperation when the benefits to defection are great. Even in the classroom, it seems impossible to get the Pareto optimal equilibrium without some kind of binding agreement.