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The back-scratching game

Murray, Cameron K., Frijters, Paul and Vorster, Melissa (2017) The back-scratching game. Journal of Economic Behavior and Organization, 142. pp. 494-508. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2017.07.018

Abstract

We develop a new experiment to study the emergence of welfare-reducing bilateral alliances within larger groups, and the effectiveness of institutional interventions to curtail ‘back-scratching’. In each of the 25 rounds of our experiments, a player (the ‘allocator’) nominates one of three others in a group as a co-worker (the ‘receiver’), which determines the group production that period to be the productivity of the receiver (which varies by round), but also gives the receiver a bonus and makes them the allocator in the next round. Alliances then form if two individuals keep choosing each other even when their productivities are lower than that of others, causing efficiency losses. We study whether particular interventions reduce the rate of alliance formation. Random allocator rotation policies were found to be ineffective, whether implemented prior to, or following, a Baseline treatment. Low bonuses did significantly reduce the advent of alliances. There hence seems to be some hope in preventing back-scratching via reducing the gain that can be made by alliances.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/journal-of-e...
Additional Information: © 2017 Elsevier B.V.
Divisions: Centre for Economic Performance
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 23 Aug 2018 11:01
Last Modified: 20 Jan 2020 06:43
Projects: DP120103520, ARC FT130100738
Funders: Australian Research Council
URI: http://eprints.lse.ac.uk/id/eprint/90088

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