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 language | English (US) |
---|---|
Title of host publication | Experiments in Environmental Economics |
Publisher | Taylor and Francis Inc. |
Pages | 345-378 |
Number of pages | 34 |
Volume | 1 |
ISBN (Electronic) | 9781315196350 |
ISBN (Print) | 9781138717398 |
State | Published - Apr 27 2018 |
All Science Journal Classification (ASJC) codes
- Social Sciences(all)