Communication in Coordination Games

Russell Cooper, Douglas V. DeJong, Robert Forsythe () and Thomas Ross

The Quarterly Journal of Economics, 1992, vol. 107, issue 2, 739-771

Abstract: We present experimental evidence on nonbinding, preplay communication in bilateral coordination games. To evaluate the effect of "cheap talk," we 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.

Date: 1992
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Working Paper: COMMUNICATION IN COORDINATION GAMES (1989)
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