Commitments, Intentions, Truth and Nash Equilibria
Karl Schlag () and
Péter Vida ()
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich
Games with multiple Nash equilibria are believed to be easier to play if players can communicate. We present a simple model of communication in games and investigate the importance of when communication takes place. Sending a message before play captures talk about intentions, after play captures talk about past commitments. We focus on equilibria where messages are believed whenever possible. Applying our results to Aumannâ€™s Stag Hunt game we find that communication is useless if talk is about commitments, while the efficient outcome is selected if talk is about intentions. This confirms intuition and empirical findings in the literature.
Keywords: Pre-play communication; cheap talk; coordination. (search for similar items in EconPapers)
JEL-codes: C72 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-gth, nep-hpe and nep-mic
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