Nudging Towards Socially Efficient Norms




Doe, Peter

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Within groups, members must coordinate on similar levels of effort in order to finish their tasks at the same time. In group coordination games with multiple Nash equilibria such as the minimum effort game (MEG), which equilibrium will prevail is difficult to predict. The MEG models group coordination by rewarding all players for higher group minimum effort levels, while punishing players for expending effort above the minimum effort of all group members. In most laboratory experiments involving the MEG, participants fail to coordinate on the Pareto-efficient Nash equilibrium. Here I design an experiment to show that ‘nudge’ periods in which coordination is facilitated are effective at reducing the amount of coordination failure. I include in the design a method to show that structuring these ‘nudge’ periods in continuous time (rather than discrete time) increases the persistence of successful coordination as continuous time provides subjects the opportunity to change strategies mid-period and thus reduce uncertainty. I advance previous research into group coordination by providing a design to test ‘nudges’ in continuous time games. My experiment is structured so that a period of induced efficient coordination will develop a focal equilibrium that persists even when the incentives to coordinate are weakened. I conduct power analyses to estimate the necessary group size.