Public announcements and coordination in dynamic global games: Experimental evidence

• I investigate the effects of an uninformative announcement on coordination.
• Under the conditions of uniqueness, the announcement plays no role in behavior.
• Under conditions of multiplicity, the announcement serves as a coordination device.
• Beliefs play a central role in the way information affects coordination.

This paper uses a two-stage variant of a dynamic global game often used to model speculative attacks to study experimentally whether and when the introduction of an announcement by an uninformed outsider facilitates coordination. Consistent with previous findings, when multiplicity is theoretically possible, the announcement serves as a coordination device and significantly affects the probability of a successful speculative attack. On the other hand, importantly, when the model predicts a unique equilibrium in the same environment, I find that the announcement has no effect on behavior. Beliefs about others’ actions appear to play a crucial role in the differential effect of the announcement on attacking behavior under different information conditions.