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Does communication increase the precision of beliefs?

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  • Bruttel, Lisa
  • Werner, Vasilisa

Abstract

This paper explores one channel in which communication facilitates cooperation — belief precision. A prisoner’s dilemma experiment shows that communication not only promotes optimism about the partner’s cooperation but also increases the precision of this belief, thereby reducing strategic uncertainty.

Suggested Citation

  • Bruttel, Lisa & Werner, Vasilisa, 2024. "Does communication increase the precision of beliefs?," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524005160
    DOI: 10.1016/j.econlet.2024.112032
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    1. David J. Cooper & Kai-Uwe K?hn, 2014. "Communication, Renegotiation, and the Scope for Collusion," American Economic Journal: Microeconomics, American Economic Association, vol. 6(2), pages 247-278, May.
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    6. Fabian Dvorak & Sebastian Fehrler, 2024. "Negotiating Cooperation under Uncertainty: Communication in Noisy, Indefinitely Repeated Interactions," American Economic Journal: Microeconomics, American Economic Association, vol. 16(3), pages 232-258, August.
    7. Fonseca, Miguel A. & Normann, Hans-Theo, 2012. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments," European Economic Review, Elsevier, vol. 56(8), pages 1759-1772.
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    9. Charles A. Holt & Angela M. Smith, 2016. "Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 110-139, February.
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    11. Andreas Freitag & Catherine Roux & Christian Thöni, 2021. "Communication And Market Sharing: An Experiment On The Exchange Of Soft And Hard Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(1), pages 175-198, February.
    12. Peter T. Dijkstra & Marco A. Haan & Lambert Schoonbeek, 2021. "Leniency Programs and the Design of Antitrust: Experimental Evidence with Free-Form Communication," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(1), pages 13-36, August.
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    16. Maximilian Andres, 2024. "Equilibrium selection in infinitely repeated games with communication," CEPA Discussion Papers 75, Center for Economic Policy Analysis.
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    More about this item

    Keywords

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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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