Coordination under loss contracts

In this paper we study the effects that loss contracts—prepayments can be clawed back later—have on group coordination when there is strategic uncertainty. To do so, investigate choices made by experimental subjects in a minimum effort game. control sessions, incentives are formulated as classic gain contract, while treatment framed an isomorphic contract. Contrary to most results contract literature, our setup contracts backfire reducing of groups and worsening between members. Such suggest success off context dependent offer explanation why not implemented more often wild.