Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution | Zendy

Stefano Demichelis | Zendy; Jörgen W. Weibull | Zendy

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Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution

Author(s) -

Stefano Demichelis,

Jörgen W. Weibull

Publication year - 2008

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.98.4.1292

Subject(s) - lexicographical order , coordination game , mathematical economics , axiom , meaning (existential) , nash equilibrium , outcome (game theory) , preference , economics , computer science , microeconomics , mathematics , combinatorics , epistemology , philosophy , geometry

Language is a powerful coordination device. We generalize the cheap-talk approach to pre-play communication by way of introducing a meaning correspondence between messages and actions, and by postulating two axioms met by natural languages. Players have a lexicographic preference, second to material payoffs, against deviating from the meaning correspondence. Under two-sided communication in generic and symmetric nxn-coordination games, a Nash equilibrium component in such a lexicographic communication game is evolutionarily stable if and only if it results in the unique Pareto efficient outcome of the underlying game. We extend the analysis to one-sided communication in arbitrary finite two-player games. (JEL C72, C73, Z13)

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