ABSTRACT
Non-binding communication, or cheap talk, has been associated with the resolution of coordination failures (see Cooper et al., 1992; Clark et al., 2001) and social dilemmas in both laboratory and field experiments (see Isaac and Walker, 1988; Ostrom and Walker, 1991; Ostrom, et al., 1994; Cardenas et al., 2004). In simple coordination games, communication is expected to reduce the uncertainty of what other players are likely to do and hence facilitate coordination in the better equilibrium. In social dilemma games, the reasons why communication works are still unclear. Perhaps communication results in an increased sense of group identity, an enhancement of normative orientations toward cooperation, or a necessity to seek or avoid verbal approval or reprimand when promises of cooperation are fulfilled or violated.
