Communication, Leadership and Coordination Failure Cedex Discussion Paper Series Communication, Leadership and Coordination Failure *

Using experimental methods, this paper investigates the limits of communication and leadership in aiding group coordination in a minimum e ort game. Choosing the highest e ort is the payo dominant Nash equilibrium in this game, and communication and leadership are expected to help in coordinating on such an equilibrium. We consider an environment in which the bene ts of coordination are low compared to the cost of mis-coordination. In this environment, players converge to the most ine cient equilibrium in the absence of a leader. We look at two types of leaders: a cheap-talk leader-communicator who suggests an e ort level but is free to choose a di erent level from the one suggested, and a rst-mover leader whose choice of e ort is observed by the rest of the group. We study whether leadership can prevent coordination failure and whether leadership allows coordination on a higher e ort after a history of coordination failure. We nd that in this tough environment both types of leadership are insu cient to escape from the low-e ort equilibrium but leadership has some (limited) ability to prevent coordination failure. With the help of the strategy method for the followers' responses we nd that the main reason for the persistence of coordination failure in this environment is the presence of followers who do not follow (or would not have followed) the leader.