Kim, Yong-Gwan: Evolution of Communication with Partial Common Interest
World Conference Econometric Society, 2000, Seattle

Andreas Blume, University of Iowa
Douglas V. deJong, University of Iowa
Yong-Gwan Kim, SungKyunKwan University
Goeffrey Sprinkle, Indiana University
Evolution of Communication with Partial Common Interest
Session: C-1-6  Friday 11 August 2000  by Kim, Yong-Gwan
This paper uses experiments to investigate communication with a priori meaningless messages and messages with pre-established meanings. We consider simple games of information transmission in which the interests of senders and receivers are imperfectly aligned. Under four canonical incentive conditions, we get communication outcomes. However, it is by no means a fait accompli. We observe significant deterioration and recoding of literal meanings, sucker behavior by receivers, and focal point effects and initial condition effects that impact the dynamics and outcomes. Communication outcomes generally satisfy a conservative partial common interest criterion; however, one cannot uniformly apply equilibrium or a particular selection criterion to address communication in these games. Equilibria are not always obtained. Neither influentiality, ex ante efficiency or Farrell's refinement can be uniformly applied to the games. Considerable information about alignment of interests and resulting incentive structures are required before a particular outcome can be predicted with some degree of certainty.

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