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 playersbeliefs, we fully characterize the e¤ects of pre-play communication in symmetric 2 2 games. One-way communication weakly increases coordination on Nash equilib-rium outcomes, although average payo¤s sometimes decrease. Two-way commu-nication further improves payo¤s in some games, but is detrimental in others. Moving beyond the class of symmetric 2 2 games, we \u85nd that communica-tion 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