A MODEL OF PRE-GAME COMMUNICATION

A model is presented where players communicate prior to the play of a two-player, complete-information game. Each of two common hypotheses i s examined: That communication yields Nash-equilibrium outcomes, and t hat, within the equilibrium framework, communication yields Pareto-eff icient equilibria. The strong version of each of these hypotheses is r ejected but weaker results are established. The main result is that, i f we assume equilibrium and that players communicate for a long time, then in every equilibrium of every game, each player will get a payoff at least as great as that of his worst Pareto-efficient Nash equilibr ium. (C) 1994 Academic Press, Inc.