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Language, meaning and games A model of communication, coordination and evolution

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  • Stefano Demichelis

    (University of Pavia - Department of Mathematics)

  • Jörgen Weibull

    (SSE - Department of Economics - Stockholm School of Economics, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)

Abstract

Language is arguably a powerful coordination device in real-life interactions. We here develop a game-theoretic model of pre-play communication that generalizes the cheap-talk approach by way of introducing a meaning correspondence between messages and actions, and postulating two axioms met by natural languages. Deviations from this correspondence are called dishonest and players have a lexicographic preference for honesty, second to material payoffs. The model is first applied to two-sided preplay communication in finite and symmetric two-player games and we establish that, in generic and symmetric n × n - 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 approach to one-sided communication in finite, not necessarily symmetric, two-player games.

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Paper provided by HAL in its series Working Papers with number hal-00354224.

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Date of creation: Jan 2009
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Handle: RePEc:hal:wpaper:hal-00354224

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  1. Cheap talk matters
    by Economic Logician in Economic Logic on 2008-11-07 16:01:00
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Cited by:
  1. Huck, Steffen & Kübler, Dorothea & Weibull, Jörgen, 2012. "Social norms and economic incentives in firms," Journal of Economic Behavior & Organization, Elsevier, vol. 83(2), pages 173-185.
  2. 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).
  3. 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.
  4. Hernández, Penélope & Urbano, Amparo & Vila, José E., 2012. "Pragmatic languages with universal grammars," Games and Economic Behavior, Elsevier, vol. 76(2), pages 738-752.
  5. 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.
  6. 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.
  7. Cary Deck & Maroš Servátka & Steven Tucker, 2012. "An Examination of the Effect of Messages on Cooperation under Double-Blind and Single-Blind Payoff Procedures," Working Papers in Economics 12/17, University of Canterbury, Department of Economics and Finance.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. McGinn, Kathleen L. & Milkman, Katherine L. & Nöth, Markus, 2012. "Walking the talk in multiparty bargaining: An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 278-291.
  14. 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.
  15. 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.

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