Coordination with endogenous groups

- Allowing people to choose their groups improves group coordination.
- Information about other groups does not significantly affect group coordination.
- Subjects waste less effort when allowed to choose their own groups.

The endogenous choice of groups can have an important effect on coordination behavior, but it is an underexplored area of research. In this study, I examine how endogenous group choice affects coordination in a laboratory setting using the minimum-effort game. Most studies on coordination use randomly assigned groups, with some showing that successful coordination can be achieved if the subjects have some social interaction. This study shows that an alternative strategy to improving coordination behavior and equilibrium play is to allow subjects some choice over their group membership.