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COMMUNICATION AND COORDINATION IN A TWO‐STAGE GAME
Author(s) -
Bjedov Tjaša,
Madiès Thierry,
Villeval Marie Claire
Publication year - 2016
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12325
Subject(s) - coordination game , conflict resolution , economics , microeconomics , cheap talk , test (biology) , win win game , political science , paleontology , law , biology
We study the impact of communication on behavior in a two‐stage coordination game with asymmetric payoffs. We test experimentally whether individuals can avoid a head‐to‐head confrontation by means of coordinated strategies. In particular we analyze whether and how quickly a conflict‐avoidance take turn strategy can emerge. First, our results show that players learn to solve the conflict by choosing opposite options at both stages of the game. Second, many adopt a take turn strategy to sustain coordination over time and alleviate the inequality induced by the asymmetry of payoffs. Third, communication increases the likelihood of conflict resolution regardless of whether communication is unilateral or bilateral. ( JEL C91, D74, L15, H71)