Costly Communication in Groups: Theory and an Experiment
I develop a novel model of group-based deliberation in which communication is costly in two directions: agents must pay separate costs to send and to receive messages. Equilibrium strategies have an intuitive characterization - those with the best information send, those with the worst information receive. But free-riding leads to less information exchange than is optimal. Testing the model`s predictions with an experiment I find that subjects overcommunicate when costs are high, but fail to benefit from this as much as they should. In welfare terms the experiment finds that listening costs are more harmful to welfare, in contrast with theory, which indicates sending costs. The experiment also suggests that the existence of costly communication channels can reduce total welfare.
|Date of creation:||Jun 2012|
|Date of revision:||Feb 2014|
|Contact details of provider:|| Postal: |
Web page: http://www.econ.pitt.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2010. "Strategic Thinking," Levine's Working Paper Archive 661465000000001148, David K. Levine.
- Olszewski, Wojciech, 2004. "Informal communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 180-200, August.
- Eliaz, Kfir & Ray, Debraj & Razin, Ronny, 2007.
"Group decision-making in the shadow of disagreement,"
Journal of Economic Theory,
Elsevier, vol. 132(1), pages 236-273, January.
- Eliaz, Kfir & Ray, Debraj & Razin, Ronny, 2004. "Group Decision-Making in the Shadow of Disagreement," CEPR Discussion Papers 4480, C.E.P.R. Discussion Papers.
- Debraj Ray & Kfir Eliaz & Ronny Razin, 2004. "Group Decision-Making in the Shadow of Disagreement," Working Papers 2004.83, Fondazione Eni Enrico Mattei.
- Jordi Brandts & Gary Charness, 2000.
"Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games,"
Springer, vol. 2(3), pages 227-238, March.
- Charness, Gary B & Brandts, Jordi, 1998. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," University of California at Santa Barbara, Economics Working Paper Series qt4kx7d5pv, Department of Economics, UC Santa Barbara.
- Brandts, J. & Charness, G., 1998. "Hot Vs. Cold: Sequential Responses and Preference Stability in Experimental Games," UFAE and IAE Working Papers 424.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Jordi Brandts & Gary Charness, 1998. "Hot vs. cold: Sequential responses and preference stability in experimental games," Economics Working Papers 321, Department of Economics and Business, Universitat Pompeu Fabra.
- Doraszelski Ulrich & Gerardi Dino & Squintani Francesco, 2003. "Communication and Voting with Double-Sided Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-41, August.
- Abhijit Banerjee & Rohini Somanathan, 2001. "A Simple Model Of Voice," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 189-227, February.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
When requesting a correction, please mention this item's handle: RePEc:pit:wpaper:499. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alistair Wilson)
If references are entirely missing, you can add them using this form.