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Strategic response: A key to understand how cheap talk works

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  • Stephane Bergeron
  • Maurice Doyon
  • Laurent Muller

Abstract

Experimental protocols testing the effectiveness of cheap talk are numerous but have generated conflicting results. The theoretical interpretation of hypothetical bias as a strategic response according to the perceived consequence could be the missing key to understand these opposite results from the literature. Increasing evidence suggests that this bias rises from subjects’ perception of how stated preferences surveys will be used; some subjects believing that stated valuations can impact the price of the good, while others that it will influence its provision. Subjects strategically respond by adjusting their declared values accordingly. This paper reports experimental findings supporting the presence of strategic response, showing that cheap talk operates by mitigating these behaviors and potentially explaining cheap talk's heterogeneous results. Les protocoles expérimentaux testant l'efficacité de «cheap talk» sont nombreux mais ont généré des résultats contradictoires. L'interprétation théorique du biais hypothétique en tant que réponse stratégique en fonction de la conséquence perçue pourrait être la clé pour comprendre ces résultats contradictoires de la littérature. Des preuves de plus en plus nombreuses suggèrent que ce biais provient de la perception qu'ont les sujets de la manière dont les enquêtes sur les préférences déclarées seront utilisées; certains sujets croient que les évaluations déclarées peuvent avoir une incidence sur le prix du bien, tandis que d'autres pensent que cela influera sur sa disponibilité. Les sujets réagissent stratégiquement en ajustant leurs valeurs déclarées en conséquence. Cet article rapporte des résultats expérimentaux soutenant la présence d'une réponse stratégique, montrant que le «cheap talk» attenu ces comportements, expliquant les résultats hétérogènes.

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  • Stephane Bergeron & Maurice Doyon & Laurent Muller, 2019. "Strategic response: A key to understand how cheap talk works," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(1), pages 75-83, March.
    • Handle: RePEc:bla:canjag:v:67:y:2019:i:1:p:75-83
    DOI: 10.1111/cjag.12182
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    2. Mergenthaler, Marcus & Schröter, Iris, 2020. "Institutionelle Grenzen und Perspektiven bei der ökonomischen Bewertung und der Bereitstellung von Tierwohl," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305598, German Association of Agricultural Economists (GEWISOLA).
    3. Maurice Doyon & Stéphane Bergeron & Jacinthe Cloutier, 2022. "Analyse des préférences des résidents-propriétaires de la ville de Québec pour l’aménagement de bassins de rétention à proximité," CIRANO Working Papers 2022s-17, CIRANO.
    4. Xie, Lusi & Adamowicz, Wiktor & Kecinski, Maik & Fooks, Jacob R., 2022. "Using economic experiments to assess the validity of stated preference contingent behavior responses," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    5. Mergenthaler, Marcus & Schröter, Iris, 2020. "Institutionelle Grenzen und Perspektiven bei der ökonomischen Bewertung und der Bereitstellung von Tierwohl," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305598, German Association of Agricultural Economists (GEWISOLA).

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