Institution formation in weakest-link games

IF 2.3 3区经济学 Q2 ECONOMICS

Journal of Economic Behavior & Organization Pub Date : 2025-03-09 DOI:10.1016/j.jebo.2025.106943

Alejandro Caparrós , Esther Blanco , Michael Finus

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Abstract

We study the role of endogenous formation of institutions in overcoming coordination failures in weakest-link games with fixed neighborhoods. In our setting, institutions are weak and only form and make decisions by unanimity. Experimental results show that such institutions are formed and mitigate the coordination problem, raising equilibrium provision levels, but falling short of providing Pareto-optimal contributions. Given the multiplicity of Nash equilibria in weakest-link games, we consider several equilibrium refinements that allow for (small) errors by individuals. Without institutions, risk dominance and the Quantal Response Equilibrium (QRE) with (almost) perfectly rational agents select the worst equilibrium, while all equilibria are trembling-hand perfect and proper. With the possibility of forming an institution, all these concepts predict the Pareto-optimal equilibrium as the unique outcome. As we do not observe this outcome in our experimental results, only the Agent QRE model with bounded rationality can explain our data.

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我们研究了在具有固定邻域的弱联系博弈中，机构的内生形成在克服协调失败中的作用。在我们的设定中，机构是弱的，只能通过一致同意来形成和决策。实验结果表明，这种机构的形成缓解了协调问题，提高了均衡供给水平，但却无法提供帕累托最优贡献。鉴于弱联系博弈中纳什均衡的多重性，我们考虑了几种允许个人（小）失误的均衡改进。在没有机构的情况下，风险支配和（几乎）完全理性的代理人的量子反应均衡（QRE）会选择最差的均衡，而所有均衡都是完美和适当的。在有可能形成制度的情况下，所有这些概念都预测帕累托最优均衡是唯一的结果。由于我们在实验结果中没有观察到这一结果，因此只有具有有界理性的代理 QRE 模型才能解释我们的数据。

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来源期刊

Journal of Economic Behavior & Organization ECONOMICS-

CiteScore

3.80

自引率

9.10%

发文量

392

期刊介绍： The Journal of Economic Behavior and Organization is devoted to theoretical and empirical research concerning economic decision, organization and behavior and to economic change in all its aspects. Its specific purposes are to foster an improved understanding of how human cognitive, computational and informational characteristics influence the working of economic organizations and market economies and how an economy structural features lead to various types of micro and macro behavior, to changing patterns of development and to institutional evolution. Research with these purposes that explore the interrelations of economics with other disciplines such as biology, psychology, law, anthropology, sociology and mathematics is particularly welcome.