Fragile Meaning - An Experiment

Andreas Blume, Charles Noussair and Bohan Ye

No 2021-01, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: Absence of a shared language is an evident barrier to effective communication. The impact of lack of common knowledge of a shared language is potentially more insidious. We induce lack of common knowledge of a shared language in a sender-receiver game experiment by having message availability be uncertain. We consider an environment in which agents agree on the optimal action in every state, there are equilibria in which messages with pre-specified meanings are used in accordance with those meanings, and these equilibria maximize both sender and receiver payouts. We do find, however, that these equilibria are fragile. Observed behavior is more consistent with pooling equilibria, in which receivers ignore messages. This effect is stronger when the pooling action is optimal for a larger set of receiver beliefs.

Pages: 38
Date: 2021-04
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Journal Article: Fragile meaning - an experiment (2024)
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