Communication and Efficiency in Coordination Game Experiments

Abstract

We examine the effects of pre-play communication in an experimental game with conflicting risk-dominant and payoff-dominant equilibria. We find that most players condition their choices on the messages received, and do so in an intuitive way, announcing an intention to play the payoff-dominant action, and choosing the payoff-dominant action if the opponent expresses the same intention. However, a significant minority of players misrepresent their intentions. In some sessions where these players appear, behavior converges to an equilibrium in which subjects misrepresent their intentions and play the risk-dominant equilibrium.

Citation

Burton, A., Loomes, G. and Sefton, M. (2005), "Communication and Efficiency in Coordination Game Experiments", Morgan, J. (Ed.) Experimental and Behavorial Economics (Advances in Applied Microeconomics, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 63-85. https://doi.org/10.1016/S0278-0984(05)13003-X