This paper studies the evolution of effective pre-play communication in games where a single communication round precedes a simultaneous-move, complete-information game. The paper identifies stable outcomes under population learning dynamics in which individuals with some probability replace their current strategy with a best reply against beliefs supported on a sample of currently used strategies. It is shown that under these conditions the effectiveness of one-sided pre-play communication is inversely related to risk in the underlying game, and to the size of the message space. Multi-sided communication can be shown to be more effective than one-sided communication; i.e., risk and the size of the message space play no role. This requires that all players communicate, have the same preferred equilibrium and messages have some small a priori information content that identifies message profiles that signal agreement on a strict equilibrium in the underlying game.
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Length: 39 pages Date of creation: 18 Apr 1996 Date of revision: Handle: RePEc:wpa:wuwpga:9604001
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Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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