When Does Communication Improve Coordination?

We study costless pre-play communication of intentions among inexperienced players. Using the level-k model of strategic thinking to describe players’beliefs, we fully characterize the e¤ects of pre-play communication in symmetric 2 2 games. One-way communication weakly increases coordination on Nash equilibrium outcomes, although average payo¤s sometimes decrease. Two-way communication further improves payo¤s in some games, but is detrimental in others. Moving beyond the class of symmetric 2 2 games, we …nd that communication facilitates coordination in common interest games with positive spillovers and strategic complementarities, but there are also games in which any type of communication hampers coordination. JEL: C72.