Abstract
We explore in an equilibrium framework whether games with multiple Nash equilibria are easier to play when players can communicate. We consider two variants, modelling talk about future plans and talk about past actions. The language from which messages are chosen is endogenous, messages are allowed to be vague. We focus on equilibria where messages are believed whenever possible, thereby develop a theory of credible communication. Predictions confirm the longstanding intuition for Aumann’s (1990) Stag Hunt game which applies directly to an investment game with positive spillovers. Our results shed new light on the multiplicity of equilibria in economic applications.
Dokumententyp: | Paper |
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Keywords: | Pre-Play Communication, Cheap Talk, Credibility, Coordination, Language, Multiple Equilibria. |
Fakultät: | Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
Sonderforschungsbereiche > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A1 - Allokationsmechanismen in Organisationen und Märkten |
Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
JEL Classification: | C72, D83 |
URN: | urn:nbn:de:bvb:19-epub-25291-5 |
Sprache: | Englisch |
Dokumenten ID: | 25291 |
Datum der Veröffentlichung auf Open Access LMU: | 21. Sep. 2015, 06:43 |
Letzte Änderungen: | 04. Nov. 2020, 13:06 |