Learning, words and actions : experimental evidence on coordination-improving information

This paper reports experimental results from a one-shot game with two Nash equilibria: the first one is efficient, the second one relies on weakly dominated strategies. The experimental treatments consider three information-enhancing mechanisms in the game: simple repetition, cheap-talk messages and observation of past actions from the current interaction partner. Our experimental results show the use of dominated strategies is quite widespread. Any kind of information (through learning, words or actions) increases efficiency. As regards coordination, we find that good history performs better than good messages; but bad history performs worse than bad messages.