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Cheap Talk with Two Audiences: An Experiment

Author

Listed:
  • 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.

Suggested Citation

  • Mikhail Drugov & Roberto Hernán-González & Praveen Kujal & Marta Troya Martinez, 2013. "Cheap Talk with Two Audiences: An Experiment," Working Papers 13-32, Chapman University, Economic Science Institute.
  • Handle: RePEc:chu:wpaper:13-32
    as

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    File URL: http://www.chapman.edu/research-and-institutions/economic-science-institute/_files/WorkingPapers/cheap-talk-with-two-audiences-an-experiment.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Ertac, Seda & Koçkesen, Levent & Ozdemir, Duygu, 2016. "The role of verifiability and privacy in the strategic provision of performance feedback: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 100(C), pages 24-45.
    2. Altmann, Steffen & Falk, Armin & Grunewald, Andreas, 2013. "Incentives and Information as Driving Forces of Default Effects," IZA Discussion Papers 7610, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

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

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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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