Games and Economic Behavior 66 (2009) 506–525
Communication, cooperation and collusion in team tournaments—
An experimental study
, Christina Strassmair
University of Innsbruck, Austria
University of Göteborg, Sweden
University of Munich, Seminar for Economic Theory, Ludwigstraße 28 (Rgb.), D-80539 Munich, Germany
Received 27 October 2005
Available online 18 April 2008
We study the effects of communication in an experimental tournament between teams. When teams, rather than individuals,
compete for a prize there is a need for intra-team coordination in order to win the inter-team competition. Introducing communi-
cation in such situations may have ambiguous effects on effort choices. Communication within teams may promote higher efforts
by mitigating the internal free-rider problem. Communication between competing teams may lead to collusion, thereby reducing
efforts. In our experiment we control the channels of communication by letting subjects communicate through an electronic chat.
We ﬁnd, indeed, that communication within teams increases efforts and communication between teams reduces efforts. We use
team members’ dialogs to explain these effects of communication, and check the robustness of our results.
2008 Elsevier Inc. All rights reserved.
JEL classiﬁcation: C92; J33
Keywords: Tournament; Team decision making; Communication; Collusion; Free-riding; Experiment
Tournaments between teams are a useful tool to motivate team members to elicit high levels of efforts. Team
tournaments can be implemented both within a given company, but also across companies. An example for the within-
company case might be a competition of different units within an advertising agency to put forward the best proposal
for a large advertising campaign contract, which is then rewarded with a large bonus and additional resources for the
members of the successful unit. Likewise, large automobile companies sometimes rely on the competition between
several working groups to develop the design of a new car. An example for a team tournament across companies is a
research contest where teams of researchers compete for being the ﬁrst to innovate or deliver a pre-speciﬁed ‘product,’
which is then rewarded by a large prize. There are numerous examples for research tournaments, like the contest to
select an engine for the ﬁrst-ever passenger line between two British cities, which was sponsored by Liverpool and
Corresponding author at: University of Innsbruck, Department of Public Finance, Universitaetsstrasse 15, A-6020 Innsbruck, Austria.
E-mail addresses: firstname.lastname@example.org (M. Sutter), email@example.com (C. Strassmair).
0899-8256/$ – see front matter © 2008 Elsevier Inc. All rights reserved.