Actions Speak Louder Than Words : Should We Let Them?

I analyze concurrent vs. sequential organizational decision-making where two agents first communicate then make decisions attempting to both adapt to their local conditions and coordinate with their partner. Sequential decision-making improves com- munication by allowing first movers to speak with their actions rather than a cheap-talk message. However, first movers also have an incentive to over-adapt to their state, knowing second movers will conform to their decision. At times sequential decision-making can Pareto-improve on concurrent structures, and vice versa. Concurrent decisions are optimal if and only if the two units’ weights on coordination are sufficiently similar and high