IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v107y2018icp153-181.html
   My bibliography  Save this article

How does communication affect beliefs in one-shot games with complete information?

Author

Listed:
  • Ellingsen, Tore
  • Östling, Robert
  • Wengström, Erik

Abstract

This paper experimentally studies unilateral communication of intentions in eight different two-player one-shot normal form games with complete information. We find that communication is used both to coordinate and to deceive, and that messages have a significant impact on beliefs and behavior even in dominance solvable games. Nash equilibrium and cognitive hierarchy jointly account for many regularities, but not all of the evidence. Sophisticated sender behavior is especially difficult to reconcile with existing models.

Suggested Citation

  • Ellingsen, Tore & Östling, Robert & Wengström, Erik, 2018. "How does communication affect beliefs in one-shot games with complete information?," Games and Economic Behavior, Elsevier, vol. 107(C), pages 153-181.
    • Handle: RePEc:eee:gamebe:v:107:y:2018:i:c:p:153-181
    DOI: 10.1016/j.geb.2017.11.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S089982561730204X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.geb.2017.11.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Larbi Alaoui & Antonio Penta, 2016. "Endogenous Depth of Reasoning," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(4), pages 1297-1333.
    2. Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
    3. Rabin Matthew, 1994. "A Model of Pre-game Communication," Journal of Economic Theory, Elsevier, vol. 63(2), pages 370-391, August.
    4. Vincent P. Crawford, 2016. "New Directions for Modelling Strategic Behavior: Game-Theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 131-150, Fall.
    5. Johannes Abeler & Daniele Nosenzo & Collin Raymond, 2019. "Preferences for Truth‐Telling," Econometrica, Econometric Society, vol. 87(4), pages 1115-1153, July.
    6. David Ettinger & Philippe Jehiel, 2010. "A Theory of Deception," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 1-20, February.
    7. Stahl Dale O. & Wilson Paul W., 1995. "On Players' Models of Other Players: Theory and Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 10(1), pages 218-254, July.
    8. Binmore, Ken & McCarthy, John & Ponti, Giovanni & Samuelson, Larry & Shaked, Avner, 2002. "A Backward Induction Experiment," Journal of Economic Theory, Elsevier, vol. 104(1), pages 48-88, May.
    9. Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
    10. Isabelle Brocas & Juan D. Carrillo & Stephanie W. Wang & Colin F. Camerer, 2014. "Imperfect Choice or Imperfect Attention? Understanding Strategic Thinking in Private Information Games," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 944-970.
    11. Binmore, K & Shaked, A & Sutton, J, 1985. "Testing Noncooperative Bargaining Theory: A Preliminary Study," American Economic Review, American Economic Association, vol. 75(5), pages 1178-1180, December.
    12. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-1050, July.
    13. Tore Ellingsen & Magnus Johannesson, 2004. "Promises, Threats and Fairness," Economic Journal, Royal Economic Society, vol. 114(495), pages 397-420, April.
    14. Vincent P. Crawford & Miguel A. Costa-Gomes, 2006. "Cognition and Behavior in Two-Person Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 96(5), pages 1737-1768, December.
    15. Theo Offerman & Joep Sonnemans & Gijs Van De Kuilen & Peter P. Wakker, 2009. "A Truth Serum for Non-Bayesians: Correcting Proper Scoring Rules for Risk Attitudes ," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1461-1489.
    16. Miguel A. Costa-Gomes & Georg Weizsäcker, 2008. "Stated Beliefs and Play in Normal-Form Games," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(3), pages 729-762.
    17. Morton Deutsch, 1958. "Trust and suspicion," Journal of Conflict Resolution, Peace Science Society (International), vol. 2(4), pages 265-279, December.
    18. Vincent P. Crawford, 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," American Economic Review, American Economic Association, vol. 93(1), pages 133-149, March.
    19. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136, World Scientific Publishing Co. Pte. Ltd..
    20. Stahl, Dale O. & Haruvy, Ernan, 2008. "Level-n bounded rationality in two-player two-stage games," Journal of Economic Behavior & Organization, Elsevier, vol. 65(1), pages 41-61, January.
    21. Charness, Gary, 2000. "Self-Serving Cheap Talk: A Test Of Aumann's Conjecture," Games and Economic Behavior, Elsevier, vol. 33(2), pages 177-194, November.
    22. Jörgen W. Weibull, 2004. "Testing Game Theory," Palgrave Macmillan Books, in: Steffen Huck (ed.), Advances in Understanding Strategic Behaviour, chapter 6, pages 85-104, Palgrave Macmillan.
    23. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-1028, July.
    24. Tan, Tommy Chin-Chiu & da Costa Werlang, Sergio Ribeiro, 1988. "The Bayesian foundations of solution concepts of games," Journal of Economic Theory, Elsevier, vol. 45(2), pages 370-391, August.
    25. David Ettinger & Philippe Jehiel, 2010. "A Theory of Deception," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 1-20, February.
    26. David Sally, 1995. "Conversation and Cooperation in Social Dilemmas," Rationality and Society, , vol. 7(1), pages 58-92, January.
    27. Stefano Demichelis & Jorgen W. Weibull, 2008. "Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution," American Economic Review, American Economic Association, vol. 98(4), pages 1292-1311, September.
    28. Robert J. Aumann & Jacques H. Dreze, 2008. "Rational Expectations in Games," American Economic Review, American Economic Association, vol. 98(1), pages 72-86, March.
    29. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
    30. Farrell, Joseph, 1988. "Communication, coordination and Nash equilibrium," Economics Letters, Elsevier, vol. 27(3), pages 209-214.
    31. repec:dau:papers:123456789/5434 is not listed on IDEAS
    32. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
    33. Rey-Biel, Pedro, 2009. "Equilibrium play and best response to (stated) beliefs in normal form games," Games and Economic Behavior, Elsevier, vol. 65(2), pages 572-585, March.
    34. Sendhil Mullainathan & Joshua Schwartzstein & Andrei Shleifer, 2008. "Coarse Thinking and Persuasion," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 577-619.
    35. Tore Ellingsen & Robert Östling, 2010. "When Does Communication Improve Coordination?," American Economic Review, American Economic Association, vol. 100(4), pages 1695-1724, September.
    36. Colin F. Camerer & Teck-Hua Ho & Juin-Kuan Chong, 2004. "A Cognitive Hierarchy Model of Games," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 861-898.
    37. Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
    38. Joel Sobel, 1985. "A Theory of Credibility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(4), pages 557-573.
    39. Burton, Anthony & Sefton, Martin, 2004. "Risk, pre-play communication and equilibrium," Games and Economic Behavior, Elsevier, vol. 46(1), pages 23-40, January.
    40. Morton Deutsch & Yakov Epstein & Donnah Canavan & Peter Gumpert, 1967. "Strategies of inducing cooperation: an experimental study," Journal of Conflict Resolution, Peace Science Society (International), vol. 11(3), pages 345-360, September.
    41. Daniel Zizzo, 2010. "Experimenter demand effects in economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 13(1), pages 75-98, March.
    42. Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-1326, December.
    43. Stahl, Dale O. & Haruvy, Ernan, 2008. "Subgame perfection in ultimatum bargaining trees," Games and Economic Behavior, Elsevier, vol. 63(1), pages 292-307, May.
    44. Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2013. "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," Journal of Economic Literature, American Economic Association, vol. 51(1), pages 5-62, March.
    45. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
    46. Joseph Tao-yi Wang & Michael Spezio & Colin F. Camerer, 2010. "Pinocchio's Pupil: Using Eyetracking and Pupil Dilation to Understand Truth Telling and Deception in Sender-Receiver Games," American Economic Review, American Economic Association, vol. 100(3), pages 984-1007, June.
    47. Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
    48. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maximilian Andres, 2023. "Communication in the Infinitely Repeated Prisoner's Dilemma: Theory and Experiments," Papers 2304.12297, arXiv.org.
    2. He, Simin & Offerman, Theo & van de Ven, Jeroen, 2019. "The power and limits of sequential communication in coordination games," Journal of Economic Theory, Elsevier, vol. 181(C), pages 238-273.
    3. Maximilian Andres, 2024. "Equilibrium selection in infinitely repeated games with communication," CEPA Discussion Papers 75, Center for Economic Policy Analysis.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Crawford, Vincent P., 2017. "Let׳s talk it over: Coordination via preplay communication with level-k thinking," Research in Economics, Elsevier, vol. 71(1), pages 20-31.
    2. Vincent P. Crawford & Miguel A. Costa-Gomes & Nagore Iriberri, 2010. "Strategic Thinking," Levine's Working Paper Archive 661465000000001148, David K. Levine.
    3. Tore Ellingsen & Robert Östling, 2010. "When Does Communication Improve Coordination?," American Economic Review, American Economic Association, vol. 100(4), pages 1695-1724, September.
    4. Teck-Hua Ho & So-Eun Park & Xuanming Su, 2021. "A Bayesian Level- k Model in n -Person Games," Management Science, INFORMS, vol. 67(3), pages 1622-1638, March.
    5. Nagel, Rosemarie & Bühren, Christoph & Frank, Björn, 2017. "Inspired and inspiring: Hervé Moulin and the discovery of the beauty contest game," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 191-207.
    6. Polonio, Luca & Coricelli, Giorgio, 2019. "Testing the level of consistency between choices and beliefs in games using eye-tracking," Games and Economic Behavior, Elsevier, vol. 113(C), pages 566-586.
    7. Giovanna Devetag & Sibilla Guida & Luca Polonio, 2016. "An eye-tracking study of feature-based choice in one-shot games," Experimental Economics, Springer;Economic Science Association, vol. 19(1), pages 177-201, March.
    8. Hagenbach, Jeanne & Perez-Richet, Eduardo, 2018. "Communication with evidence in the lab," Games and Economic Behavior, Elsevier, vol. 112(C), pages 139-165.
    9. Allred, Sarah & Duffy, Sean & Smith, John, 2016. "Cognitive load and strategic sophistication," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 162-178.
    10. Dugar, Subhasish & Shahriar, Quazi, 2023. "Lying for votes," Games and Economic Behavior, Elsevier, vol. 142(C), pages 46-72.
    11. Dugar, Subhasish & Shahriar, Quazi, 2018. "Restricted and free-form cheap-talk and the scope for efficient coordination," Games and Economic Behavior, Elsevier, vol. 109(C), pages 294-310.
    12. Ellingsen, Tore & Östling, Robert, 2006. "Organizational Structure as the Channeling of Boundedly Rational Pre-play Communication," SSE/EFI Working Paper Series in Economics and Finance 634, Stockholm School of Economics.
    13. Choo, Lawrence C.Y & Kaplan, Todd R., 2014. "Explaining Behavior in the "11-20" Game," MPRA Paper 52808, University Library of Munich, Germany.
    14. Bayer, Ralph C. & Renou, Ludovic, 2016. "Logical omniscience at the laboratory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 41-49.
    15. Breitmoser, Yves & Tan, Jonathan H.W. & Zizzo, Daniel John, 2014. "On the beliefs off the path: Equilibrium refinement due to quantal response and level-k," Games and Economic Behavior, Elsevier, vol. 86(C), pages 102-125.
    16. Despoina Alempaki & Andrew M. Colman & Felix Kölle & Graham Loomes & Briony D. Pulford, 2022. "Investigating the failure to best respond in experimental games," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 656-679, April.
    17. Duffy, Sean & Smith, John, 2014. "Cognitive load in the multi-player prisoner's dilemma game: Are there brains in games?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 47-56.
    18. García-Pola, Bernardo & Iriberri, Nagore & Kovářík, Jaromír, 2020. "Non-equilibrium play in centipede games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 391-433.
    19. J. Hausfeld & K. von Hesler & S. Goldlücke, 2021. "Strategic gaze: an interactive eye-tracking study," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 177-205, March.
    20. Lai, Ernest K. & Lim, Wooyoung, 2012. "Authority and communication in the laboratory," Games and Economic Behavior, Elsevier, vol. 74(2), pages 541-560.

    More about this item

    Keywords

    Cheap talk; Pre-play communication; Noncooperative game theory;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:107:y:2018:i:c:p:153-181. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.