Invitation Games: An Experimental Approach to Coalition Formation

This paper studies how to form an efficient coalition—a group of people. More specifically, we compare two mechanisms for forming a coalition by running laboratory experiment and reveal which mechanism leads higher social surplus. In one setting, invite the subjects join meeting simultaneously, so they cannot know other subjects’ decisions. ask them sequentially, allows each subject his or her predecessor’s choice. Those who decide earn payoffs according their actions individual preferences. As result, obtain following findings. First, sequential induces surplus than simultaneous mechanism. Second, most make choices consistent with subgame-perfect Nash equilibrium in setting choose dominant strategy when exists. Finally, need look further ahead theoretically rational choice, are more likely fail rationally.