Timing of Messages and the Aumann Conjecture: A multiple-Selves Approach

Ro'i Zultan

No 1109, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: The Aumann (1990) conjecture states that cheap-talk messages do not necessarily help to coordinate on efficient Nash equilibria. In an experimental test of Aumann’s conjecture, Charness (2000) found that cheap-talk messages facilitate coordination when they precede the action, but not when they follow the action. Standard game-theoretical modeling abstracts from this timing effect, and therefore cannot account for it. To allow for a formal analysis of the timing effect, I study the sequential equilibria of the signaling game in which the sender is modeled as comprising two selves: an acting self and a signaling self. I interpret Aumann’s argument in this context to imply that all of the equilibria in this game are ‘babbling’ equilibria, in which the message conveys no information and does not affect the behavior of the receiver. Using this framework, I show that a fully communicative equilibrium exists—only if the message precedes the action but not when the message follows the action. In the latter case, no information is transmitted in any equilibrium. This result provides a game-theoretical explanation for the puzzling experimental results obtained by Charness (2000). I discuss other explanations for this timing-of-message effect and their relationship to the current analysis.

Keywords: pre-play communication; Nash equilibrium; coordination games; multiple selves (search for similar items in EconPapers)
JEL-codes: A13 C72 C91 D82 D84 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2011
New Economics Papers: this item is included in nep-cta, nep-exp, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Timing of messages and the Aumann conjecture: a multiple-selves approach (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:bgu:wpaper:1109

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