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The limited value of a second opinion: Competition and exaggeration in experimental cheap talk games

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  • Minozzi, William
  • Woon, Jonathan

Abstract

We experimentally investigate the effect of a second opinion on information transmission. Our design varies the number of senders as well as the alignment and magnitude of senders' biases in a sequential, cheap-talk, sender-receiver game. We find that decision makers do no better when a second opinion is available, irrespective of the alignment or competition between advisers, than when they receive a single opinion. Despite the fact that messaging behavior differs across experimental conditions, receivers successfully extract the same amount of information—an amount greater than what is theoretically predicted. These findings are consistent with senders using a simple strategy of naïve exaggeration, with receivers correctly recognizing this and adjusting their behavior accordingly.

Suggested Citation

  • Minozzi, William & Woon, Jonathan, 2019. "The limited value of a second opinion: Competition and exaggeration in experimental cheap talk games," Games and Economic Behavior, Elsevier, vol. 117(C), pages 144-162.
    • Handle: RePEc:eee:gamebe:v:117:y:2019:i:c:p:144-162
    DOI: 10.1016/j.geb.2019.05.004
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    Cited by:

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    3. Albertazzi, Andrea & Ploner, Matteo & Vaccari, Federico, 2024. "Welfare and competition in expert advice markets," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 74-103.

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    More about this item

    Keywords

    Strategic information transmission; Sender-receiver games; Multiple senders; Laboratory experiment;
    All these keywords.

    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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