Pre-play Communication Research Articles

Communication, renegotiation and coordination with private values

An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the coordinated outcomes. The set of communication-proof equilibria is a small and relatively homogeneous subset of the set of qualitatively diverse Bayesian Nash equilibria. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players' beliefs and interim Pareto efficient.

An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games

Abstract We examine how preplay communication and clustering affect play in a challenging hybrid experimental game on networks. Free-form chat is impressively effective in achieving the nonequilibrium efficient outcome, but restricted communication has little effect. We support this result with a model about the credibility of cheap-talk messages. We also offer a model of message diffusion that correctly predicts more rapid diffusion without clustering. We show an interaction effect of network structure and communication technologies. A remarkable result is that restricted communication is quite effective in a network stag hunt but not in our extended game.

Trust and Promises over Time

Using a large-scale hybrid laboratory and online trust experiment with and without preplay communication, we investigate how the passage of time affects trust. Communication (predominantly through promises) raises cooperation, trust, and trustworthiness by about 50 percent. This result holds even when three weeks pass between the time of the trustee’s message/the trustor’s decision to trust and the time of the trustee’s contribution choice and even when this contribution choice is made outside of the lab. Delay between the beginning of the interaction and the time to reciprocate neither substantially alters trust or trustworthiness nor affects how subjects communicate. (JEL C91, D83, D91, Z13)

Reaching agreement on contribution behavior in different cultures-a public goods game with representatives in Japan and Germany

We discuss the results of an experimental public good game with group representatives in Germany and Japan, societies with varying levels of individualism. Representatives are permitted to communicate with their constituencies, but not with other representatives. We focus on accountability between representative and his constituency and on the risk taken in the interaction between representatives. We find that in Germany, subjects more readily trust a stranger's cooperativeness, groups reach agreement faster and are quicker to discuss and formulate a strategy in pre-play communication vis-a-vis Japanese subjects, where group formation takes longer. Further, we find a stronger end effect in Germany than in Japan, where the period of play explains much less variance in contribution behavior.Our study contributes to our understanding of intercultural differences in group formation and behavior when small group representatives invest in the public good, with implications for cross-cultural management, negotiation and leadership. Our evidence on between-country differences seems to empirically validate Yuki's (2003) framework for group behavior. We hope that our findings will stimulate further enquiry into human group behavior from a cross-cultural perspective.

Communication and cooperation in Prisoner's Dilemma games

We consider a Prisoner's Dilemma model with a pre-play communication stage. Players get a disutility from deceiving others after sending a message of conditional cooperation. Each player's realized lying aversion cost is private information. We prove existence and characterize the (unique) symmetric perfect Bayesian equilibrium that maximizes cooperation. In this distinguished equilibrium, the frequency of cooperation decreases as material gains from lying (or losses from being deceived) increase. We introduce an iterated procedure allowing to characterize the set of rationalizable strategies. We find that cooperation may decrease as a population starts to value honesty more. We extend the model to account for the possibility of a benefit obtained when lying or the effect of the audience size.

Communication, Renegotiation and Coordination With Private Values

An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the feasible coordinated outcomes. Communication-proof equilibria provide a narrow selection from the large set of qualitatively diverse Bayesian Nash equilibria in such games. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players' beliefs, interim Pareto efficient, and evolutionarily stable.

Fighting alone versus fighting for a team: An experiment on multiple pairwise contests

Abstract People who compete alone may entertain different psychological motivations from those who compete for a team. We examine how psychological motivations influence individual competitive behavior in response to a head start or a handicap when competing alone or competing for a team. We find that contestants’ behavior in both individual and team contests exhibits a psychological momentum effect, whereby leaders fight harder than trailers. However, the momentum effect is significantly larger in individual contests than in team contests and further disappears in team contests that are enriched with pre-play communication. The standard economic model, which predicts neither momentum effects nor treatment differences, fails to explain our findings. The findings can be better explained by a combination of two behavioral models: disappointment aversion and team spirit.

The impact of smiling cues on social cooperation

AbstractWhile there is a plethora of experimental studies on the effects of preplay communication on economic behavior, little is known about the impact of simple cues, such as smiling, on pro‐sociality. This article presents a comprehensive analysis exploring how the presence of a smiling opportunity affects pro‐social behavior as measured by a one‐shot linear public goods game. Our design varies (i) whether smiling is costly or costless and (ii) whether one or both members in a group are given the opportunity to smile. To test for the robustness of our results, we consider two versions of smiling cues: (i) a smiling label and (ii) a smiling face (emoji). Our findings indicate that introducing a cost for smiling has detrimental behavioral consequences regardless of the cue. Specifically, when smiling is costly, only a small minority of subjects are willing to smile as opposed to when smiling is costless. As a result, subjects contribute significantly less. These results remain the same regardless of the type of smiling cue that subjects can send. Overall, our findings provide new evidence that simple cues such as smiles embody information that influences pro‐social behavior in social interactions.

Communication, Renegotiation and Coordination with Private Values

An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the feasible coordinated outcomes. Communication-proof equilibria provide a narrow selection from the large set of qualitatively diverse Bayesian Nash equilibria in such games. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players' beliefs, interim Pareto efficient, and evolutionarily stable.

Making it public: The effect of (private and public) wage proposals on efficiency and income distribution

The implications of (public or private) pre-play communication and information revelation in a labour relationship is not well understood. We address these implications theoretically and experimentally. In our baseline experiments, the employer offers a wage to the worker who may then accept or reject it. In the public and private treatment, workers, moving first, make a non-binding private or public wage proposal. Our theoretical model assumes that wage proposals convey information about a worker’s minimum acceptable wage and are misreported with a certain probability. It predicts that, on average, wage proposals lead to higher wage offers and acceptance rates, with the highest wages under private proposals. While both, public and private, proposals increase efficiency over the baseline, private proposals generate higher worker incomes. Broad support for the theoretical predictions is found in the laboratory experiments. Our work has important implications for recent policies promoting public information on wage negotiations. We find that while wage proposals promote higher wages, efficiency, and income equality, public information on wage negotiations is likely to benefit firms more than workers.

Communication in a threshold public goods game under ambiguity

ABSTRACT This paper offers evidence on the impact of communication on the provision of public goods whose quality is uncertain, such as investment in prevention or fundraising in favour of non-governmental organizations (NGO). We run a laboratory experiment with two treatments, where the control variable is pre-play communication via unrestricted text chat. A binary threshold public goods game with four-person groups, threshold of three contributors and provision mechanism with elements of ambiguity is at the core of the design. A private signal linked to the real value of the public good supports the contribution decision. We find that unexpected low-valued public goods can undermine future willingness to contribute, although the benefits of communication still prevail in the form of higher public good provision. We also detect unprecedented inefficiency coming from overcontribution, given that subjects tend to neglect the free-rider problem. Chat analysis reveals that players favour the minimization of ambiguity over the maximization of the group earnings, so that we finally speculate that under uncertainty satisficing is more salient than optimizing.

Valuable Cheap Talk and Equilibrium Selection

Intuitively, we expect that players who are allowed to engage in costless communication before playing a game would be foolish to agree on an inefficient outcome amongst the set of equilibria. At the same time, however, such preplay communication has been suggested as a rationale for expecting Nash equilibria in general. This paper presents a plausible formal model of cheap talk that distinguishes and resolves these possibilities. Players are assumed to have an unlimited opportunity to send messages before playing an arbitrary game. Using an extension of fictitious play beliefs, minimal assumptions are made concerning which messages about future actions are credible and hence contribute to final beliefs. In this environment, it is shown that meaningful communication among players leads to a Nash equilibrium (NE) of the action game. Within the set of NE, efficiency then turns out to be a consequence of imposing optimality on the cheap talk portion of the extended game. This finding contrasts with previous “babbling” results.

Rational coordination with no communication or conventions

AbstractWe study pure coordination games where in every outcome, all players have identical payoffs, ‘win’ or ‘lose’. We identify and discuss a range of ‘purely rational principles’ guiding the reasoning of rational players in such games and compare the classes of coordination games that can be solved by such players with no preplay communication or conventions. We observe that it is highly nontrivial to delineate a boundary between purely rational principles and other decision methods, such as conventions, for solving such coordination games.

The effects of pre-play communication in a coordination game with incomplete information

The effects of pre-play communication in a battle-of-the-sexes game with incomplete information regarding players’ intensity of preferences is compared to the game with no communication. Pre-play communication significantly increases payoffs and the probability of coordination, while reducing miscoordination. Communication is largely informative. A key prediction of the theory, that when two players send different messages, they coordinate on the preferred action of the agent sending the higher message, is generally satisfied. As predicted, communication becomes more informative as the cost of miscoordination increases.

An Economic Analysis of Business Drinking: Evidence from a Lab-in-the-field Experiment

Alcohol consumption is an important component of business negotiations across many cultures, yet this behavior remains unmodeled and its potential implications untested. This paper is a step towards filling that gap. We develop a theory that combines guilt-aversion with a canonical alcohol myopia framework. Our GAAM (guilt aversion and alcohol myopia) model predicts that intoxication increases promise-making but has no effect on promise-breaking. We test these predictions using a prisoner’s dilemma game with pre-play communication in a lab-in-the-field experiment. Among males, we find behavior consistent with predictions: intoxication promotes promise-making behavior but does not impact the rate at which promises are trusted or broken. Consequently, intoxication increases communication efficiency. We do not observe intoxication to impact female promise-making, trusting, or promise-breaking behaviors. This is consistent with previous empirical findings that females are substantially less sensitive than males to alcohol-induced myopia.

Happiness, cooperation and language

According to existing research across several disciplines (management, psychology, economics and neuroscience), positive mood can have positive effects, engendering more altruistic, open and helpful behaviour, but can also work through a more negative channel by inducing inward-orientation, assertiveness, and reduced use of information. This leaves the impact on cooperation in interactive and strategic situations unclear. We find evidence from 490 participants in a laboratory experiment suggesting that participants in an induced positive mood cooperate less in a repeated Prisoner’s Dilemma than participants in a neutral setting. This is robust to the number of repetitions or the inclusion of pre-play communication. In order to understand why positive mood might damage the propensity to cooperate, we conduct a language analysis of the pre-play communication between players. This analysis indicates that subjects in a more positive mood use more inward-oriented and more negative language.

The role of communication in fair division with subjective claims

When agents’ claims regarding the division of a cake are subjective and conflicting, it is difficult to obtain an outcome that is considered fair by the involved parties. This paper investigates how pre-play communication affects behavior and outcomes in fair division experiments where various procedures are used to obtain an allocation of the available resources. On the one hand, it is known from bargaining experiments that communication often leads to faster agreements and to more egalitarian allocations. On the other hand, communication may facilitate the emergence of minority-exploiting coalitions when procedures are used which are not collusion-proof. We find that communication increases both efficiency and perceived fairness of the implemented division independent of the procedure used to obtain a solution. Interestingly, collusion, while highly beneficial for those participating, is rarely attempted even when private communication channels are available.

Renegotiation and Coordination with Private Values

An equilibrium is communication-proof if it is unaffected by new opportunities to communicate and renegotiate. We characterize the set of equilibria of coordination games with pre-play communication in which players have private preferences over the feasible coordinated outcomes. Communication-proof equilibria provide a narrow selection from the large set of qualitatively diverse Bayesian Nash equilibria in such games. Under a communication-proof equilibrium, players never miscoordinate, play their jointly preferred outcome whenever there is one, and communicate only the ordinal part of their preferences. Moreover, such equilibria are robust to changes in players’ beliefs, interim Pareto efficient, and evolutionarily stable.

Teams promise but do not deliver

Individuals and two-person teams play a hidden-action trust game with pre-play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates, but this does not extend to teams. While teams promise to cooperate at the same rate as individuals, they consistently renege on those promises. Additional treatments begin to explore the basis for team behavior. We rule out explanations hypothesizing that concern for partner's payoff drives team outcomes, as absent within-team communication, promise fulfillment rates increase compared to individuals. Rather, the results are consistent with the idea that communication between teammates provides support for self-serving behavior.

On the Solutions of Games in Normal Forms: Particular Models based on Nash Equilibrium Theory

Abstract The main objective of this paper is to present in a deductive way, solutions for general games played under normal conditions following competitive paths, applying core principles of Nash equilibrium. Here the normal approach implies strategic choices available for each player, formulated and implemented without any information concerning specific choices to be made by others players. It is convenient to keep in mind that John von Neumann and Oskar Morgenstern outlined a set of conditions for Nash equilibrium for a game in normal form, proposed as the basic framework to analyze the conditions and requirements for a particular Nash equilibrium to be the solution of the game. Theorems that exhibit imbedding relations among the Nash equilibriums of the game are given to examine the role of pre-play communication and the imbedding order in equilibrium selection. A core argument to claim here is that a generic case of Nash equilibriums that are strategically unstable relative to maxi-min strategies is given to emphasize the role of moves of the third kind and pre-play communication in correlated and coordinated solutions and the need to account for cases where Nash equilibriums are not plausible or even desirable as solutions for a game in normal form.