Language and Leadership : an Experimental Study of Ambiguity and Vagueness in the Announcement Game

One of the responsibilities of political leaders is to transmit information about states of the world that he/she observes to their followers in a way that facilitates coordination. This task is composed of two parts. One is a strategic component in which the leader attempts to partition the state space and the other is how to execute this partition strategy (how to communicate the chosen partition). This second component is typically ignored since, in equilibrium, once the strategic component is …gured out, it does not matter how the equilibrium partition is communicated to agents. In this paper we present evidence that while the language used to execute a communication strategy may not be of signi…cance at the equilibrium of the game, it does a¤ect the e¢ ciency of the convergence process. The execution strategies we investigate di¤er according to their degree of ambiguity and vagueness. What we …nd is that vague communication (i.e. the use of natural language) and ambiguous communication (the use of interval strategies) are basically equivalent except in those situations where the leader uses an excessive number of words. However, they both o¤er lower e¢ ciencies than a strategy involving the truthful communication of the payo¤ relevant state variable when the interests of the leader and followers are su¢ ciently di¤erent. JEL Classi…cation: C7, D8, C9