CREATING EXPECTATIONAL ASSETS IN THE LABORATORY - COORDINATION IN WEAKEST-LINK GAMES

We study coordination games with multiple equilibria, in which players are penalized for picking numbers higher than the minimum anybody pic ks, and everyone prefers a larger minimum. 'Weakest-link' games like t his model organizational situations in which the worst component of a product or process determines its overall quality. In experimental gro ups, the best equilibrium was reached infrequently. Aggregating two gr oups into a larger one always hurt. We argue that players' beliefs abo ut what the minimum will be are an 'expectational asset' (or liability ) which is socially complex, linking organization-level behavior and t he resource-based view of the firm.