THE ECONOMIC VALUE OF NATURAL LANGUAGE COMMUNICATION: THEORY AND EXPERIMENTS

Abstract

Language is a powerful and complex human tool facilitating social and economic decisions. That the rich structure of language has evidently survived an evolutionary process has led some economists to argue for the importance of understanding its influence on human decision-making. Recently, an extensive experimental literature reveals, in relation to a well-designed predetermined language space, efficient economic outcomes emerge more readily when players can communicate using natural language. This dissertation investigates why natural language communication promotes efficient economic outcomes. In doing so, I bridge theory and experiments in a way that sheds light on the rich structure of language.