Communication, Renegotiation and Coordination with Private Values (Extended Version)

Yuval Heller and Christoph Kuzmics

MPRA Paper from University Library of Munich, Germany

Abstract: An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the feasible coordinated outcomes. Communication-proof equilibria provide a narrow selection from the large set of qualitatively diverse Bayesian Nash equilibria in such games. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players' beliefs, interim Pareto efficient, and evolutionarily stable.

Keywords: cheaptalk; communication-proofness; renegotiation-proofness; secrethandshake; incomplete information; evolutionary robustness (search for similar items in EconPapers)
JEL-codes: C72 C73 D82 (search for similar items in EconPapers)
Date: 2020-09-14, Revised 2021-07-26
New Economics Papers: this item is included in nep-des, nep-gth, nep-isf and nep-mic
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