We study communication in a two-player coordination game with Pareto-ranked equilibria. Prior research demonstrates … that efficient coordination is difficult without communication but obtains regularly with (mandatory) costless pre …-play messages. In a laboratory experiment, we modify communication by making the sending of messages optional and costly. Even small …

: communication, and punishment (allowing subjects to engage in costly reductions of one another’s earnings after learning of their … contribution decisions). We find that communication increases contributions more than punishment, and, taking into account the cost … of punishment, only communication significantly increases subjects’ earnings and thus efficiency. We study three forms of …

: communication, and punishment (allowing subjects to engage in costly reductions of one another’s earnings after learning of their … contribution decisions). We find that communication increases contributions more than punishment, and, taking into account the cost … of punishment, only communication significantly increases subjects’ earnings and thus efficiency. We study three forms of …

-play communication: numerical (tabular) only, and verbal and numerical. We find that either kind of pre-play communication increases … trusting, trustworthiness, or both, in inter-subject comparisons, but that the inclusions of verbal communication generates …