Communication in Asymmetric Group Competition over Public Goods

This paper examines whether and how communication can help groups solve coordination and free-rider problems when they compete with another group for a public-good prize. We find that when group members make an anonymous individual decision on whether or not to contribute to the group success, within-group cheap talk communication significantly reduces miscoordination and free-riding. To measure how much miscoordination remains when communication is allowed, we employ a control treatment where we remove coordination and free-riding incentives by having group members reach a unanimous group decision on how much to contribute. We find that group level contributions are not significantly different in the two cases. Communication therefore completely eliminates miscoordination and free-riding within groups and leads group members to act as one agent in making decisions. Content analysis of group communication reveals that groups explicitly designate specific contributors following a rotation scheme and they understand the essence of implementing mixed strategy equilibrium.