Communication and coordination in signalling games : an experimental study

This paper reports on an experiment testing Credible Message Rationalizability (CMR) in one-shot and repeated signaling games with costless communication. CMR is a non-equilibrium theory combining rationalizability with the idea that players will, using the natural meaning of the language, transmit enough information to coordinate on a mutually beneficial outcome. Two conventions of behavior arise in the games, Partial and Full Truth-telling. In one-shot games, subjects manage to communicate roughly as predicted by CMR, which predicts that only the maximum amount of true information consistent with rationality will be transmitted. In repeated games, Full truth-telling is more prevalent. The repeated game gives the receiver power to impose a preferred convention. Full truth-telling is especially prevalent when there is a conflict between conventions.