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Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information

Author

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  • Nicolas Jacquemet

    () (PSE - Paris School of Economics, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Adam Zylbersztejn

    (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

We experimentally study an asymmetric coordination game with two Nash equilibria: one is Pareto-efficient, the other is Pareto-inefficient and involves a weakly dominated strategy. We assess whether information about the interaction partner helps eliminate the imperfect equilibrium. Our treatments involve three information-enhancing mechanisms: repetition and two kinds of individual signals: messages from partner or observation of his past choices. Repetition-based learning increases the frequencies of the most efficient outcome and the most costly strategic mismatch. Moreover, it is superseded by individual signals. Like previous empirical studies, we find that signals provide a screening of partners' intentions that reduces the frequency of coordination failures. Unlike these studies, we find that the transmission of information between partners, either via messages or observation, does not suffice to significantly increase the overall efficiency of outcomes. This happens mostly because information does not restrain the choice of the dominated action by senders.

Suggested Citation

  • Nicolas Jacquemet & Adam Zylbersztejn, 2013. "Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00845123, HAL.
  • Handle: RePEc:hal:pseose:halshs-00845123
    DOI: 10.1515/bejte-2012-0018
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00845123
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    File URL: https://halshs.archives-ouvertes.fr/halshs-00845123/document
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    References listed on IDEAS

    as
    1. Nicolas Jacquemet & Adam Zylbersztejn, 2014. "What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis," Review of Economic Design, Springer;Society for Economic Design, vol. 18(4), pages 243-264, December.
    2. Gary E. Bolton & Elena Katok & Axel Ockenfels, 2004. "How Effective Are Electronic Reputation Mechanisms? An Experimental Investigation," Management Science, INFORMS, vol. 50(11), pages 1587-1602, November.
    3. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
    4. John Duffy & Nick Feltovich, 2006. "Words, Deeds, and Lies: Strategic Behaviour in Games with Multiple Signals," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 669-688.
    5. Rick L. Williams, 2000. "A Note on Robust Variance Estimation for Cluster-Correlated Data," Biometrics, The International Biometric Society, vol. 56(2), pages 645-646, June.
    6. Bracht, Juergen & Feltovich, Nick, 2009. "Whatever you say, your reputation precedes you: Observation and cheap talk in the trust game," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1036-1044, October.
    7. Gregory M. Parkhurst & Jason F. Shogren & Chris Bastian, 2004. "Repetition, Communication, and Coordination Failure," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 141-152, June.
    8. Duffy, John & Feltovich, Nick, 2002. "Do Actions Speak Louder Than Words? An Experimental Comparison of Observation and Cheap Talk," Games and Economic Behavior, Elsevier, vol. 39(1), pages 1-27, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Cognitive ability and the effect of strategic uncertainty," Theory and Decision, Springer, vol. 81(1), pages 101-121, June.
    2. Nicolas Jacquemet & Adam Zylbersztejn, 2014. "What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis," Review of Economic Design, Springer;Society for Economic Design, vol. 18(4), pages 243-264, December.
    3. Adam Zylbersztejn, 2013. "Strategic signaling or emotional sanctioning? An experimental study of ex post communication in a repeated public goods game," Documents de travail du Centre d'Economie de la Sorbonne 13011, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2014. "Cognitive ability and the effect of strategic uncertainty," Working Papers halshs-01095897, HAL.
    5. repec:hal:journl:halshs-00611696 is not listed on IDEAS
    6. Nicolas Jacquemet & Stephane Luchini & Jason Shogren & Adam Zylbersztejn, 2011. "Coordination with Communication under Oath," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00635801, HAL.
    7. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Cognitive ability and the effect of strategic uncertainty," Theory and Decision, Springer, vol. 81(1), pages 101-121, June.
    8. repec:hal:cesptp:halshs-00611696 is not listed on IDEAS
    9. Nicolas Jacquemet & Stephane Luchini & Jason Shogren & Adam Zylbersztejn, 2011. "Coordination with Communication under Oath," Working Papers halshs-00635801, HAL.
    10. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games," PSE - Labex "OSE-Ouvrir la Science Economique" hal-01359231, HAL.
    11. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2013. "Bounded Rationality and Strategic Uncertainty in a Simple Dominance Solvable Game," Economics Discussion / Working Papers 13-14, The University of Western Australia, Department of Economics.
    12. repec:hal:journl:halshs-01261036 is not listed on IDEAS

    More about this item

    Keywords

    coordination game; communication; cheap-talk; observation;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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