Let׳s talk it over: Coordination via preplay communication with level-k thinking

Vincent Crawford

Research in Economics, 2017, vol. 71, issue 1, 20-31

Abstract: This paper reconsiders Farrell׳s (1987) and Rabin׳s (1994) analyses of coordination via preplay communication, focusing on Farrell׳s analysis of Battle of the Sexes. Replacing their equilibrium and rationalizability assumptions with a structural non-equilibrium model based on level-k thinking, I reevaluate Farrell and Rabin׳s assumptions on how players use language and their conclusions on the limits of communication in bringing about coordination. The analysis partly supports their assumptions about how players use language, but suggests that their “agreements” do not reflect a full meeting of the minds. A level-k analysis also yields very different conclusions about the effectiveness of communication.

Keywords: Preplay communication of intentions; Coordination; Battle of the Sexes; Behavioral game theory; Noncooperative games (search for similar items in EconPapers)
Date: 2017
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Working Paper: Let׳s talk it over: Coordination via preplay communication with level-k thinking (2017)
Working Paper: Let’s Talk It Over: Coordination Via Preplay Communication With Level-k Thinking (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:71:y:2017:i:1:p:20-31

DOI: 10.1016/j.rie.2016.10.001

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