Communication in coordination games

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

Research output: Contribution to journalArticlepeer-review

310 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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