Language and government coordination: An experimental study of communication in the announcement game

•We study how a leader distributes payoff relevant information to its followers.•We study the partitioning of the state space and how it is communicated.•We find that the language used to communicate partition affects the efficiency.•Also, human leaders are very sophisticated in masking the true state of the world.

One of the key roles of government is to coordinate the activities of citizens. One reason why governments are efficient facilitators of coordinated action, in addition to their ability to force compliance or tax, is that they are typically endowed with more information than the individuals they govern. This advantage creates a dilemma for them, however, since it forces them to decide on how they should distribute the information in their possession to the population. This paper investigates this question. We investigate the “Announcement Game” defined by the government and those it governs and focus on communication strategy that government uses to communicate private information to the citizens. This communication strategy involves (1) partitioning the state space in an attempt to mask the true state of the world and (2) choosing what type of language to use in order to communicate elements of this partition. We present evidence that the language used to execute a communication strategy does affect the efficiency of the equilibrium convergence process and also demonstrate that subjects playing the role of the government exhibit a great deal of sophistication in the communication strategies they employ and the language they use to execute them.