Ignorance is bliss: An experimental study of the use of ambiguity and vagueness in the coordination games with asymmetric payoffs

Marina Agranov, Andrew Schotter

    Research output: Contribution to journalArticle

    Abstract

    We consider a game where one player, the Announcer, has to communicate the value of a payoff relevant state of the world to a set of players who play a coordination game with multiple equilibria. While the Announcer and the players agree that coordination is desirable, since the payoffs of the players at the equilibria are unequal, they disagree as to which equilibrium is best. We demonstrate experimentally that in such coordination games, in order to mask the asymmetry of equilibrium payoffs, it may be advantageous for a utilitarian benevolent Announcer to communicate in an ambiguous or vague manner. (JEL C71, D81, D83).

    Original languageEnglish (US)
    Pages (from-to)77-103
    Number of pages27
    JournalAmerican Economic Journal: Microeconomics
    Volume4
    Issue number2
    DOIs
    StatePublished - May 2012

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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