Communication in coordination games

Russell Cooper, Douglas V. DeJong, Robert Forsythe, Thomas W. Ross

Research output: Contribution to journalArticle

286 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)739-771
Number of pages33
JournalQuarterly Journal of Economics
Volume107
Issue number2
DOIs
StatePublished - May 1992

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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    Cooper, R., DeJong, D. V., Forsythe, R., & Ross, T. W. (1992). Communication in coordination games. Quarterly Journal of Economics, 107(2), 739-771. https://doi.org/10.2307/2118488