Creating Expectational Assets in the Laboratory: Coordination in ‘Weakest-Link’ Games
Article first published online: 9 NOV 2006
Copyright © 1994 John Wiley & Sons, Ltd.
Strategic Management Journal
Supplement: Trustworthiness as a Source of Competitive Advantage
Volume 15, Issue Supplement S1, pages 101–119, Winter 1994
How to Cite
Knez, M. and Camerer, C. (1994), Creating Expectational Assets in the Laboratory: Coordination in ‘Weakest-Link’ Games. Strat. Mgmt. J., 15: 101–119. doi: 10.1002/smj.4250150908
- Issue published online: 9 NOV 2006
- Article first published online: 9 NOV 2006
- experimental economics;
- resource-based view;
- group norms
We study coordination games with multiple equilibria, in which players are penalized for picking numbers higher than the minimum anybody picks, and everyone prefers a larger minimum. ‘Weakest-link games like this model organizational situations in which the worst component of a product or process determines its overall quality. In experimental groups, the best equilibrium was reached infrequently. Aggregating two groups into a larger one always hurt. We argue that players’ beliefs about what the minimum will be are an ‘expectational asset’ (or liability) which is socially complex, linking organization-level behavior and the resource-based view of the firm.