Communication in Coordination Games
The authors present experimental evidence on nonbinding, preplay communication in bilateral coordination games. To evaluate the effect of "cheap talk," they consider two communication structures (one-way and two-way communication) and two types of coordination games (one with a cooperative strategy and a second in which one strategy is less "risky"). In games with a cooperative strategy, one-way communication increases play of the Pareto-dominant equilibrium relative to the no communication baseline; two-way communication does not always decrease the frequency of coordination failures. In the second type of game, two-way communication always leads to the Pareto-dominant Nash equilibrium, while one-way communication does not. Coauthors are Douglas V. DeJong, Robert Forsythe, and Thomas W. Ross. Copyright 1992, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Volume (Year): 107 (1992)
Issue (Month): 2 (May)
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