Journal of Logic, Language, and InformationVol. 12, No. 1 (2003), pp. 1-11 (11 pages)
The paper presents a variation of the EMAIL Game, originally proposed by Rubinstein (American Economic Review, 1989), in which coordination of the more rewarding-risky joint course of actions is shown to obtain, even when the relevant game is, at most, “mutual knowledge.” In the example proposed, a mediator is introduced in such a way that two individuals are symmetrically informed, rather than asymmetrically as in Rubinstein, about the game chosen by nature. As long as the message failure probability is sufficiently low, with the upper bound being a function of the game payoffs, conditional beliefs in the opponent’s actions can allow players to choose a more rewarding-risky action. The result suggests that, for efficient coordination to obtain, the length of interactive knowledge on the game, possibly up to “almost common knowledge,” does not seem to be a major conceptual issue and that emphasis should be focused instead on the communication protocol and an appropriate relationship between the reliability of communication channels and the payoffs at stake.