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Cheap Talk with Two Audiences: An Experiment

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Author Info

  • Mikhail Drugov

    ()
    (Universidad Carlos III de Madrid, University of Warwick and CEPR)

  • Roberto Hernán-González

    ()
    (Departamento de Teoría e Historia Económica, Universidad de Granada)

  • Praveen Kujal

    ()
    (Middlesex University Business School)

  • Marta Troya Martinez

    ()
    (Department of Economics, University of Oxford)

Abstract

In this paper we experimentally test strategic information transmission between one informed and two uninformed agents in a cheap-talk game. We find evidence of the "disciplining" effect of public communication as compared to private; however, it is much weaker than predicted by the theory. Adding a second receiver naturally increases the complexity of strategic thinking when communication is public. Using the level-k model, we exploit the within subject design to show how individuals decrease their level-k in public communication. Surprisingly, we find that individuals become more sophisticated when they communicate privately with two receivers rather than one.

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Bibliographic Info

Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 13-32.

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Length: 28 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:chu:wpaper:13-32

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Related research

Keywords: Cheap Talk; Communication; Experiment; Level-k; Cognitive ability; Cognitive Reflection Test;

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References

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  1. David Gill & Victoria Prowse, 2013. "Cognitive ability and learning to play equilibrium: A level-k analysis," Economics Series Working Papers 641, University of Oxford, Department of Economics.
  2. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, American Economic Association, vol. 100(3), pages 984-1007, June.
  3. Marina Agranov & Elizabeth Potamites & rew Schotter & Chloe Tergiman, 2012. "Beliefs and Endogenous Cognitive Levels: An Experimental Study," Mathematica Policy Research Reports, Mathematica Policy Research 7497, Mathematica Policy Research.
  4. repec:fth:stanho:e-89-7 is not listed on IDEAS
  5. Kawagoe, Toshiji & Takizawa, Hirokazu, 2009. "Equilibrium refinement vs. level-k analysis: An experimental study of cheap-talk games with private information," Games and Economic Behavior, Elsevier, Elsevier, vol. 66(1), pages 238-255, May.
  6. Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 25(3), pages 309-327, December.
  7. Weber, Roberto A., 2003. "'Learning' with no feedback in a competitive guessing game," Games and Economic Behavior, Elsevier, Elsevier, vol. 44(1), pages 134-144, July.
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  9. Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2013. "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 5-62, March.
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  11. Maria Goltsman & Gregory Pavlov, 2008. "How to Talk to Multiple Audiences," UWO Department of Economics Working Papers, University of Western Ontario, Department of Economics 20081, University of Western Ontario, Department of Economics.
  12. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 384-394, March.
  13. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, American Economic Association, vol. 85(5), pages 1313-26, December.
  14. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
  15. Farrell, Joseph & Gibbons, Robert, 1989. "Cheap Talk with Two Audiences," American Economic Review, American Economic Association, American Economic Association, vol. 79(5), pages 1214-23, December.
  16. Miguel A. Costa-Gomes & Georg Weizs�cker, 2008. "Stated Beliefs and Play in Normal-Form Games," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 729-762.
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