This game has multiple Nash equilibria and cheap talk is allowed, so correlated equilibria are possible. Here’s how you implement a correlated equilibrium if your opponent is smart enough:
“We have two minutes to talk, right? I’m going to ask you to flip a coin (visibly to both of us) at the last possible moment, the exact second where we must cease talking. If the coin comes up heads, I promise I’ll cooperate, you can just go ahead and claim the whole prize. If the coin comes up tails, I promise I’ll defect. Please cooperate in this case, because you have nothing to gain by defecting, and anyway the arrangement is fair, isn’t it?”
This neglects diminishing marginal utility—few people would actually prefer a 50% chance at everything to a 100% chance at half of it. It does solve the coordination problem, though. Interesting approach.
This game has multiple Nash equilibria and cheap talk is allowed, so correlated equilibria are possible. Here’s how you implement a correlated equilibrium if your opponent is smart enough:
“We have two minutes to talk, right? I’m going to ask you to flip a coin (visibly to both of us) at the last possible moment, the exact second where we must cease talking. If the coin comes up heads, I promise I’ll cooperate, you can just go ahead and claim the whole prize. If the coin comes up tails, I promise I’ll defect. Please cooperate in this case, because you have nothing to gain by defecting, and anyway the arrangement is fair, isn’t it?”
This neglects diminishing marginal utility—few people would actually prefer a 50% chance at everything to a 100% chance at half of it. It does solve the coordination problem, though. Interesting approach.