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Coordination and Cheap Talk: Indirect versus Direct Messages

Muruvvet Buyukboyaci and Serkan Küçükşenel ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we experimentally compare the effect of costless direct and indirect messages on the risky action choices, hence on coordinations in stag-hunt games. We show that there is no effect of costless indirect messages on the frequency of risky action choices and hence on coordination on the payoff-dominant equilibrium. With direct messages, however, we find that there is a significant effect of pre-play communication on efficient coordination. One potential reason of not seeing a significant effect of indirect messages is the difference in agents' message-interpretations. Another potential reason may be the existence of lie-averse agents.

Keywords: coordination; cheap talk; risk information; costless messages (search for similar items in EconPapers)
JEL-codes: C72 C91 D82 D84 (search for similar items in EconPapers)
Date: 2016-01-21
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
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