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Journal of Applied Mathematics
Volume 2015, Article ID 910614, 11 pages
http://dx.doi.org/10.1155/2015/910614
Research Article

The Strategic Role of Nonbinding Communication

1Escuela de Economía y Administración, Universidad Industrial de Santander, Calle 9 con 27, Bucaramanga, Colombia
2ICS, Faculty of Behavioural Social Sciences, University of Groningen, Grote Rozenstraat 31, 9712 TG Groningen, Netherlands

Received 1 December 2014; Revised 27 March 2015; Accepted 28 March 2015

Academic Editor: Jens Großer

Copyright © 2015 Luis A. Palacio et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper studies the conditions that improve bargaining power using threats and promises. We develop a model of strategic communication, based on the conflict game with perfect information, in which a noisy commitment message is sent by a better-informed sender to a receiver who takes an action that determines the welfare of both. Our model captures different levels of aligned-preferences, for which classical games such as stag hunt, hawk-dove, and prisoner’s dilemma are particular cases. We characterise the Bayesian perfect equilibrium with nonbinding messages under truth-telling beliefs and sender’s bargaining power assumptions. Through our equilibrium selection we show that the less conflict the game has, the more informative the equilibrium signal is and less credibility is necessary to implement it.