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Coordination and Cheap Talk in a Battle of the Sexes

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  • Chirantan Ganguly
  • Indrajit Ray

Abstract

We consider a Battle of the Sexes game with incomplete information and allow cheap talk regarding players' private information before the game is played. We prove that the unique fully revealing symmetric cheap talk equilibrium has a desirable coordination property. Such coordination can also be obtained as a partially revealing cheap talk equilibrium. These outcomes can also be achieved using corresponding incentive compatible mechanisms, however, for different ranges of the prior probability.

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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/13-01.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 13-01.

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Length: 12 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:bir:birmec:13-01

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Keywords: Battle of the Sexes; Private Information; Cheap Talk; Coordination; Mechanism;

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  1. In-Uck Park, 2002. "Cheap-Talk Coordination of Entry by Privately Informed Firms," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 377-393, Autumn.
  2. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1989. "Communication in the Battle of the Sexes Game: Some Experimental Results," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 568-587, Winter.
  3. Banks, Jeffrey S. & Calvert, Randall L., 1992. "A battle-of-the-sexes game with incomplete information," Games and Economic Behavior, Elsevier, vol. 4(3), pages 347-372, July.
  4. Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
  5. Cabrales, Antonio & Garcia-Fontes, Walter & Motta, Massimo, 2000. "Risk dominance selects the leader: An experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 18(1), pages 137-162, January.
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