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Costly Preplay Communication and Coordination in Stag-Hunt Games

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  • Buyukboyaci, Muruvvet
  • Kucuksenel, Serkan

Abstract

In this paper, we experimentally investigate the impact of costly indirect and direct messages on coordination levels in a stag-hunt game. We also compare the coordination rates with costly pre-play communication to the rates with costless pre-play communication. Three main insights emerge from our experiments. First, we find a significant decrease in message usage with message cost in both treatments and a higher decrease in the indirect-message treatment. Second, we find that although there is no significant effect of costless or costly indirect messages on the frequency of risky actions, both costless and costly direct messages significantly increase the frequency of risky actions. Third, while we find a significant increase in the coordination rate on the payoff-dominant equilibrium from costless indirect message treatment to costly indirect message treatment, this rate significantly decreases from costless direct message to costly direct message treatment. Our findings show that depending on the structure of messages, message cost may increase or decrease the coordination rates on the payoff-dominant equilibrium.

Suggested Citation

  • Buyukboyaci, Muruvvet & Kucuksenel, Serkan, 2016. "Costly Preplay Communication and Coordination in Stag-Hunt Games," MPRA Paper 69098, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69098
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    References listed on IDEAS

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    Cited by:

    1. Drouvelis, Michalis & Georgantzis, Nikolaos, 2019. "Does revealing personality data affect prosocial behaviour?," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 409-420.

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    More about this item

    Keywords

    coordination; cheap talk; pre-play communication; risk information; costly messages;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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