Communication, renegotiation and coordination with private values

Yuval Heller, Christoph Kuzmics

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)51-76
Number of pages26
JournalGames and Economic Behavior
Volume143
DOIs
StatePublished - Jan 2024

Bibliographical note

Publisher Copyright:
© 2023 Elsevier Inc.

Funding

We have benefited greatly from discussions with Srinivas Arigapudi, Tilman Borgers, Michael Greinecker, Jonathan Newton, Bill Sandholm, and Joel Sobel. We would like to express our gratitude to participants of various audiences for many useful comments: LEG2018 & LEG2019 conferences (in Lund and Bar-Ilan university, respectively), Bielefeld Game Theory 2018 workshop, Israeli Game Theory 2018 conference in IDC, and seminar audiences at Caltech, Tel Aviv University, University of Cyprus, Haifa University, and UC San Diego. Yuval Heller is grateful to the European Research Council for its financial support (#677057). We have benefited greatly from discussions with Srinivas Arigapudi, Tilman Borgers, Michael Greinecker, Jonathan Newton, Bill Sandholm, and Joel Sobel. We would like to express our gratitude to participants of various audiences for many useful comments: LEG2018 & LEG2019 conferences (in Lund and Bar-Ilan university, respectively), Bielefeld Game Theory 2018 workshop, Israeli Game Theory 2018 conference in IDC, and seminar audiences at Caltech, Tel Aviv University, University of Cyprus, Haifa University, and UC San Diego. Yuval Heller is grateful to the European Research Council for its financial support (# 677057 ).

FundersFunder number
Joel SobelLEG2018
University of California, San Diego
European Research Council677057
Tel Aviv University
University of Haifa

    Keywords

    • Cheap talk
    • Communication-proofness
    • Evolutionary robustness
    • Incomplete information
    • Renegotiation-proofness
    • Secret handshake

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