Communication, Renegotiation and Coordination with Private Values (Extended Working Paper Version)

70 Pages Posted: 12 Sep 2019 Last revised: 2 Mar 2022

See all articles by Yuval Heller

Yuval Heller

Bar Ilan University

Christoph Kuzmics

University of Graz - Department of Economics

Date Written: July 26, 2021

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 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.

Keywords: cheaptalk, communication-proofness, renegotiation-proofness, secrethandshake, incomplete information, evolutionary robustness

JEL Classification: C72, C73, D82

Suggested Citation

Heller, Yuval and Kuzmics, Christoph, Communication, Renegotiation and Coordination with Private Values (Extended Working Paper Version) (July 26, 2021). Available at SSRN: https://ssrn.com/abstract=3448035 or http://dx.doi.org/10.2139/ssrn.3448035

Yuval Heller

Bar Ilan University ( email )

Dept. of Economics, Building 504
Bar Ilan University
Ramat Gan, 5290002
Israel
+972 5252 82182 (Phone)

HOME PAGE: http://https://sites.google.com/site/yuval26/

Christoph Kuzmics (Contact Author)

University of Graz - Department of Economics ( email )

Universitaetsstrasse 15
RESOWI - F4
Graz, 8010
Austria

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