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Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution

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  • Stefano Demichelis
  • Jorgen W. Weibull

Abstract

Language is a powerful coordination device. We generalize the cheap-talk approach to pre-play communication by way of introducing a meaning correspondence between messages and actions, and by postulating two axioms met by natural languages. Players have a lexicographic preference, second to material payoffs, against deviating from the meaning correspondence. Under two-sided communication in generic and symmetric nxn-coordination games, a Nash equilibrium component in such a lexicographic communication game is evolutionarily stable if and only if it results in the unique Pareto efficient outcome of the underlying game. We extend the analysis to one-sided communication in arbitrary finite two-player games. (JEL C72, C73, Z13)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.4.1292
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 98 (2008)
Issue (Month): 4 (September)
Pages: 1292-1311

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Handle: RePEc:aea:aecrev:v:98:y:2008:i:4:p:1292-1311

Note: DOI: 10.1257/aer.98.4.1292
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References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Cheap talk matters
    by Economic Logician in Economic Logic on 2008-11-07 16:01:00
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Cited by:
  1. Penelope Hernandez & Amparo Urbano Salvador & Jose E. Vila, 2010. "Pragmatic Languages with Universal Grammars," Discussion Papers in Economic Behaviour 0110, University of Valencia, ERI-CES.
  2. Ellingsen, Tore & Östling, Robert, 2007. "When Does Communication Improve Coordination?," Working Paper Series in Economics and Finance 680, Stockholm School of Economics, revised 19 Jun 2008.
  3. Serra Garcia, M. & Damme, E.E.C. van & Potters, J.J.M., 2010. "Hiding an Inconvenient Truth: Lies and Vagueness," Discussion Paper 2010-029, Tilburg University, Tilburg Law and Economic Center.
  4. Feltovich, Nick & Swierzbinski, Joe, 2011. "The role of strategic uncertainty in games: An experimental study of cheap talk and contracts in the Nash demand game," European Economic Review, Elsevier, vol. 55(4), pages 554-574, May.
  5. Cary Deck & Maroš Servátka & Steven Tucker, 2013. "An examination of the effect of messages on cooperation under double-blind and single-blind payoff procedures," Experimental Economics, Springer, vol. 16(4), pages 597-607, December.
  6. Kathleen L. McGinn & Katherine L. Milkman & Markus Nöth, 2009. "Walking the Talk in Multiparty Bargaining: An Experimental Investigation," Harvard Business School Working Papers 10-039, Harvard Business School.
  7. Andersson, Ola & Wengström, Erik, 2012. "Credible communication and cooperation: Experimental evidence from multi-stage Games," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 207-219.
  8. Huck, Steffen & Kübler, Dorothea & Weibull, Jörgen, 2010. "Social Norms and Economic Incentives in Firms," IZA Discussion Papers 5264, Institute for the Study of Labor (IZA).
  9. Reuben, Ernesto & Stephenson, Matt, 2012. "Nobody Likes a Rat: On the Willingness and Consequences of Reporting Lies," IZA Discussion Papers 6998, Institute for the Study of Labor (IZA).
  10. Serra Garcia, M. & Damme, E.E.C. van & Potters, J.J.M., 2011. "Lying About What you Know or About What you do? (replaces TILEC DP 2010-016)," Discussion Paper 2011-055, Tilburg University, Tilburg Law and Economic Center.
  11. Flavio Bazzana & Luigi Mittone & Luciano Andreozzi, 2012. "The freeze-out bond exchange offer. An experimental approach," CEEL Working Papers 1204, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  12. López-Pérez, Raúl, 2012. "The power of words: A model of honesty and fairness," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 642-658.
  13. Serra Garcia, M. & Damme, E.E.C. van & Potters, J.J.M., 2010. "Which Words Bond? An Experiment on Signaling in a Public Good Game (replaced by CentER DP 2011-139)," Discussion Paper 2010-33, Tilburg University, Center for Economic Research.
  14. Serra Garcia, M. & Damme, E.E.C. van & Potters, J.J.M., 2011. "Lying About What you Know or About What you Do? (replaces CentER DP 2010-033)," Discussion Paper 2011-139, Tilburg University, Center for Economic Research.
  15. John Duffy & Felix Munoz-Garcia, 2012. "Cooperation and Signaling with Uncertain Social Preferences," Working Papers 491, University of Pittsburgh, Department of Economics, revised May 2013.

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