Coordinating Resistance Through Communication and Repeated Interaction

Abstract

Organizational and political leaders often engage in “divide-and-conquer” transgression, in which a leader extracts surplus from a victim and shares it with a beneficiary to gain the latter’s support for his transgression. This paper conducts the first experimental study to evaluate how repeated interactions with and without communication between “responders” can coordinate their resistance towards divide-and-conquer transgressions. It also investigates theoretically and empirically how social preferences can affect successful resistance against divide-and-conquer transgressions with repetition. In our experiment, repetition without communication reduces the transgression rate. Joint resistance is more common in early rounds of a supergame when players have more uncertainty about social preference types, and leaders target beneficiaries who resist transgression. We also find that repetition alone is only as effective as cheap talk communication in the one-shot game in reducing transgression. Our findings suggest that the risk associated with cooperation can impose a limit on the effectiveness of repeated interaction in facilitating cooperation in this repeated Coordinated Resistance game.