Communication is more than information sharing: The role of status-relevant knowledge

In cheap talk games where senders' accuracy of information depend on their background knowledge, a sender with image concerns may want to signal that she is knowledgeable despite having material incentives to lie. These image benefits may, in turn, depend on the type of knowledge and its perceived social status. Theoretically, we show that when some senders care sufficiently about their image, there is both a non-informative babbling equilibrium, and a separating equilibrium, in which the average sender's message is informative and receivers always follow. In a laboratory experiment, we vary the social status of knowledge (1) by providing senders with multiple-choice questions on either (a) broadsheet topics (general knowledge) or (b) tabloid topics, and (2) by systematically modifying the degree of difficulty. We find truth-telling rates to be significantly higher when senders can signal high-status knowledge.