Discussion paper

DP12353 Transparency is overrated: communicating in a coordination game with private information

We consider an experiment with a version of the Battle of the Sexes game with two-sided private
information, allowing a possible round of either one-way or two-way cheap talk before the game is played.
We compare different treatments to study truthful revelation of information and subsequent payoffs from
the game. We find that the players are overall truthful about their types in the cheap-talk phase in both
one-way or two-way talk. Furthermore, the unique symmetric cheap-talk equilibrium in the two-way
cheap talk game is played when they players fully reveal their information; however, they achieve higher
payoffs in the game when the talk is one-way as the truthful reports facilitate desired coordination.