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Cheap Talk with Multiple Audiences: an Experimental Analysis

Author

Listed:
  • Marco Battaglini

    (Princeton University)

  • Uliana Makarov

    (Princeton University)

Abstract

We examine strategic information transmission in a controlled laboratory experiment of a cheap talk game with one sender and multiple receivers. We study the change in equilibrium behavior from the addition of another audience as well as from varying the degree of conflict between the sender's and receivers' preferences. We find that, as in cheap talk games with just one receiver, information transmission is higher in games with a separating equilibrium, than in games with only a babbling equilibrium. More interestingly, we find clear evidence that the addition of another audience alters the communication between the sender and the receiver in a way consistent with the theoretical predictions. There is evidence of the presence of agents that are systematically truthful as senders and trusting as receivers: deviations from the theoretical predictions, however, tend to disappear with experience, and learning is faster precisely in the games where deviations are more pronounced.

Suggested Citation

  • Marco Battaglini & Uliana Makarov, 2012. "Cheap Talk with Multiple Audiences: an Experimental Analysis," Working Papers 1417, Princeton University, Department of Economics, Econometric Research Program..
  • Handle: RePEc:pri:metric:wp012_2011_battaglin_makarov.pdf
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    References listed on IDEAS

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    1. repec:mes:challe:v:34:y:1991:i:1:p:53-57 is not listed on IDEAS
    2. Cai, Hongbin & Wang, Joseph Tao-Yi, 2006. "Overcommunication in strategic information transmission games," Games and Economic Behavior, Elsevier, vol. 56(1), pages 7-36, July.
    3. repec:hoo:wpaper:e-89-7 is not listed on IDEAS
    4. Farrell, Joseph & Gibbons, Robert, 1989. "Cheap Talk with Two Audiences," American Economic Review, American Economic Association, vol. 79(5), pages 1214-1223, December.
    5. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
    6. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    Cited by:

    1. Battaglini, Marco & Lai, Ernest & Lim, Wooyoung & Tao-yi Wang, Joseph, 2016. "The Informational Theory of Legislative Committees: An Experimental Analysis," CEPR Discussion Papers 11356, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    cheap talk; experiment;

    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
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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