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Communication and Coordination: The Case of Boundedly Rational Players (2007)
| Content Provider | CiteSeerX |
|---|---|
| Author | Robert Östling, Z. Tore Ellingsen, Y. |
| Abstract | Using the level-k model of boundedly rational interaction, we fully characterize the e¤ects of pre-play communication in symmetric and generic 2 2 games. We …nd that oneway communication weakly increases coordination on Nash equilibrium outcomes in all such games. Although one-way communication entails Nash equilibrium when relatively sophisticated players meet, there are games in which average payo¤s fall when one-way communication is allowed. Two-way communication can yield higher average payo¤s than one-way communication in coordination games such as Stag Hunt, but in other games twoway communication reduces both average payo¤s and the degree of coordination below the no-communication level. Extending our analysis to larger and less symmetric games, we …nd that communication facilitates coordination in all two-player common interest games. However, we also identify games in which communication hampers coordination. |
| File Format | |
| Publisher Date | 2007-01-01 |
| Access Restriction | Open |
| Subject Keyword | Two-way Communication Oneway Communication Weakly Average Payo One-way Communication Entail Nash Equilibrium Symmetric Game No-communication Level Boundedly Rational Player Sophisticated Player One-way Communication Two-player Common Interest Game Level-k Model Stag Hunt Communication Hamper Coordination Game Twoway Communication Reduces Boundedly Rational Interaction Pre-play Communication Nash Equilibrium Outcome Coordination Game Average Payo Fall |
| Content Type | Text |
