Communication Strategies in a Matching Game

This paper explores the communication and choice strategies of agents in a matching game, where agents are uncertain about their payoffs, and payoffs of each agent depend on and are partly known to the potential partner. Business examples of such decisions include mergers, acquisitions, distribution channel partners, as well as manufacturing and brand alliances. When communication is informative, the communication strategy as a function of the expected payoff of the partnership involves pretending fit when expected payoff is high, pretending misfit when expected payoff is low, and telling the truth in an intermediate range. The condition for informativeness of communication turns out to be that the distribution of payoffs should have thin tails.