COORDINATING COLLECTIVE RESISTANCE THROUGH COMMUNICATION AND REPEATED INTERACTION

This paper presents a laboratory collective resistance (CR) game to study how different forms of repeated interactions, with and without communication, can help coordinate subordinates' collective resistance to a ???divide-and-conquer??? transgression against their personal interests. In the one-shot CR game, a first???mover (the ???leader???) decides whether to transgress against two responders. Successful transgression increases the payoff of the leader at the expense of the victim(s) of transgression. The two responders then simultaneously decide whether to challenge the leader. The subordinates face a coordination problem in that their challenge against the leader's transgression will only succeed if both of them incur the cost to do so. The outcome without transgression can occur in equilibrium with standard money-maximizing preferences with repeated interactions, but this outcome is not an equilibrium with standard preferences when adding non-binding subordinate ???cheap talk??? communication in the one-shot game. Nevertheless, we find that communication (in the one-shot game) is at least as effective as repetition (with no communication) in reducing the transgression rate. Moreover, communication is better than repetition in coordinating resistance, because it makes it easier for subordinates to identify others who have social preferences and are willing to incur the cost to punish a violation of social norms.Communication, Cheap Talk, Collective Resistance, Divide-and-Conquer, Laboratory Experiment, Repeated Games, Social Preferences

Communication, coordination and efficiency in evolutionary one-population models

We analyze the role of commitment in pre-play communication for ensuring efficient evolutionarily stable outcomes in coordination games. All players are a priori identical as they are drawn from the same population. In games where efficient outcomes can be reached by players coordinating on the same action we find commitment to be necessary to enforce efficiency. In games where efficienct outcomes only result from play of different actions, communication without commitment is most effective although efficiency can no longer be guaranteed. Only when there are many messages then inefficient outcomes are negligible as their basins of attraction become very small.Evolutionarily stable sets, pure coordination, cheap talk

Ten possible experiments on communication and deception

I describe ten situations in which experimental data may provide useful guidance to the study of cheap-talk games. Journal of Economic Literature Classification Numbers: C92, D8. © 2013 Elsevier B.V

Coordination in games with incomplete information: experimental results

We use experiments to study coordination in games with incomplete information and ask whether an informed player can use cheap talk strategically. Two players decide whether to enter a market where stage game payoffs either form a prisoner’s dilemma or a stag-hunt. One player knows which stage game is played while the other knows only the associated probabilities. When players engage in a prisoner’s dilemma each player prefers unilateral entry. When payoffs form a stag-hunt game, the outcome where neither enters Pareto dominates the outcome where both enter. We ask whether cheap talk aids coordination on the Pareto dominant outcome and whether the informed player can use cheap talk to engineer her preferred outcome. Consistent with previous literature, the benefit of cheap talk depends on the relationship between payoffs and risks. We find that cheap talk benefits informed players only when payoff risks are low. Key Words: cheap talk, coordination, experiments, incomplete information, risk dominance, payoff domiance

Pre-play communication and credibility: A test of Aumann's conjecture

The effectiveness of pre-play communication in achieving efficient outcomes has long been a subject of controversy. In some environments, cheap talk may help to achieve coordination. However, Aumann conjectures that, in a variant of the Stag Hunt game, a signal for efficient play is not self-enforcing and concludes that an "agreement to play [the efficient outcome] conveys no information about what the players will do." Harsanyi and Selten (1988) cite this example as an illustration of risk-dominance vs. payoff-dominance. Farrell and Rabin (1996) agree with the logic, but suspect that cheap talk will nonetheless achieve efficiency. The conjecture is tested with one-way communication. When the sender first chooses a signal and then an action, there is impressive coordination: a 94% probability for the potentially efficient (but risky) play, given a signal for efficient play. Without communication, efforts to achieve efficiency were unsuccessful, as the proportion of B moves is only 35%. I also test a hypothesis that the order of the action and the signal affects the results, finding that the decision order is indeed important. While Aumann’s conjecture is behaviorally disconfirmed when the signal is determined initially, the signal’s credibility seems to be much more suspect when the sender is known to have first chosen an action, and the results are not statistically distinguishable from those when there is no signal. Some applications and issues in communication and coordination are discussed.Cheap talk, coordination, credibility, experiment, Leex

Timing of Messages and the Aumann Conjecture: A multiple-Selves Approach

The Aumann (1990) conjecture states that cheap-talk messages do not necessarily help to coordinate on efficient Nash equilibria. In an experimental test of Aumann’s conjecture, Charness (2000) found that cheap-talk messages facilitate coordination when they precede the action, but not when they follow the action. Standard game-theoretical modeling abstracts from this timing effect, and therefore cannot account for it. To allow for a formal analysis of the timing effect, I study the sequential equilibria of the signaling game in which the sender is modeled as comprising two selves: an acting self and a signaling self. I interpret Aumann’s argument in this context to imply that all of the equilibria in this game are ‘babbling’ equilibria, in which the message conveys no information and does not affect the behavior of the receiver. Using this framework, I show that a fully communicative equilibrium exists—only if the message precedes the action but not when the message follows the action. In the latter case, no information is transmitted in any equilibrium. This result provides a game-theoretical explanation for the puzzling experimental results obtained by Charness (2000). I discuss other explanations for this timing-of-message effect and their relationship to the current analysis.pre-play communication, Nash equilibrium, coordination games, multiple selves

Communication channels and induced behavior

This paper reports recent findings on the effects of cheap talk communication on behavior. It exemplifies how different communication channels influence decisions in various games and information environments and addresses possible consequences for the design of real-world economic environments.communication, economic experiment, bargaining, public good