American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution
American Economic Review
vol. 98,
no. 4, September 2008
(pp. 1292–1311)
Abstract
Language is a powerful coordination device. We generalize the cheap-talk approach to pre-play communication by way of introducing a meaning correspondence between messages and actions, and by postulating two axioms met by natural languages. Players have a lexicographic preference, second to material payoffs, against deviating from the meaning correspondence. Under two-sided communication in generic and symmetric nxn-coordination games, a Nash equilibrium component in such a lexicographic communication game is evolutionarily stable if and only if it results in the unique Pareto efficient outcome of the underlying game. We extend the analysis to one-sided communication in arbitrary finite two-player games. (JEL C72, C73, Z13)Citation
Demichelis, Stefano, and Jorgen W. Weibull. 2008. "Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution." American Economic Review, 98 (4): 1292–1311. DOI: 10.1257/aer.98.4.1292JEL Classification
- C72 Noncooperative Games
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- Z13 Economic Sociology; Economic Anthropology