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Coordination and Cheap Talk: Indirect versus Direct Messages

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  • Buyukboyaci, Muruvvet
  • Kucuksenel, Serkan

Abstract

In this paper, we experimentally compare the effect of costless direct and indirect messages on the risky action choices, hence on coordinations in stag-hunt games. We show that there is no effect of costless indirect messages on the frequency of risky action choices and hence on coordination on the payoff-dominant equilibrium. With direct messages, however, we find that there is a significant effect of pre-play communication on efficient coordination. One potential reason of not seeing a significant effect of indirect messages is the difference in agents' message-interpretations. Another potential reason may be the existence of lie-averse agents.

Suggested Citation

  • Buyukboyaci, Muruvvet & Kucuksenel, Serkan, 2016. "Coordination and Cheap Talk: Indirect versus Direct Messages," MPRA Paper 68964, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68964
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    References listed on IDEAS

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    1. Mürüvvet Büyükboyacı & Serkan Küçükşenel, 2017. "Costly Pre‐Play Communication and Coordination in Stag‐Hunt Games," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(6), pages 845-856, September.

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    More about this item

    Keywords

    coordination; cheap talk; risk information; costless 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
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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