Abstract: Pre-play communication is cheap talk or talk that is non-binding and costless. Indeed, since words do not change subsequent payoffs, they should not affect behavior. Experimental evidence; however, suggests otherwise. We developed a simultaneous game with unilateral communication to analyze the types of cheap-talk messages that change the receivers’ decisions.

To identify the mechanisms whereby these messages affect behavior in games, we used functional Magnetic Resonance Imaging (fMRI) to correlate them with an increase in activity in the brain’s utility circuits. We found that pre-play communication affects behavior, but not all communication is the same: meaning matters. In addition, in different games, the same messages have differential effect on the brain, suggesting that the value of the message depends on the context under which it is processed.

Using connectivity analysis, we may have identified a region that processes strategic uncertainty (the fusiform) and is part of the TOM network.

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