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An experimental analysis of multidimensional cheap talk

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  • Lai, Ernest K.
  • Lim, Wooyoung
  • Wang, Joseph Tao-yi

Abstract

We design experimental games that capture the logic of Battaglini's (2002) construction of fully revealing equilibrium in multidimensional cheap talk. Two senders transmit information to a receiver over a 2×2 state space. Despite overall misaligned interests, full revelation is achieved in equilibrium by having the senders truthfully reveal along distinct dimensions. Our experimental findings confirm that more information can be extracted with two senders in a multidimensional setting. The extent to which information is transmitted depends on whether dimensional interests are aligned between a sender and the receiver, the sizes of the message spaces, and the specification of out-of-equilibrium beliefs. While inducing interest alignment on the relevant dimensions and restricting the message spaces facilitated equilibrium play and information transmission, having a fully revealing equilibrium that is supported by implausible beliefs reduced the instances in which the equilibrium was played.

Suggested Citation

  • Lai, Ernest K. & Lim, Wooyoung & Wang, Joseph Tao-yi, 2015. "An experimental analysis of multidimensional cheap talk," Games and Economic Behavior, Elsevier, vol. 91(C), pages 114-144.
  • Handle: RePEc:eee:gamebe:v:91:y:2015:i:c:p:114-144
    DOI: 10.1016/j.geb.2015.04.002
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    3. Burdea, Valeria & Montero, Maria & Sefton, Martin, 2023. "Communication with partially verifiable information: An experiment," Games and Economic Behavior, Elsevier, vol. 142(C), pages 113-149.
    4. Battaglini, Marco & Lai, Ernest K. & Lim, Wooyoung & Wang, Joseph Tao-Yi, 2019. "The Informational Theory of Legislative Committees: An Experimental Analysis," American Political Science Review, Cambridge University Press, vol. 113(1), pages 55-76, February.
    5. Lu, Shih En, 2017. "Coordination-free equilibria in cheap talk games," Journal of Economic Theory, Elsevier, vol. 168(C), pages 177-208.
    6. Hagenbach, Jeanne & Perez-Richet, Eduardo, 2018. "Communication with evidence in the lab," Games and Economic Behavior, Elsevier, vol. 112(C), pages 139-165.
    7. 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.
    8. Albertazzi, Andrea & Ploner, Matteo & Vaccari, Federico, 2021. "Welfare in Experimental News Markets," SocArXiv 5j2w8, Center for Open Science.
    9. Wonsuk Chung & Rick Harbaugh, 2019. "Biased recommendations from biased and unbiased experts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 520-540, June.
    10. Gabriele Camera & Rodney Garratt & Cyril Monnet, 2024. "Truth by Consensus: A Theoretical and Empirical Investigation," Working Papers 24.03, Swiss National Bank, Study Center Gerzensee.
    11. 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.
    12. Minozzi, William & Woon, Jonathan, 2016. "Competition, preference uncertainty, and jamming: A strategic communication experiment," Games and Economic Behavior, Elsevier, vol. 96(C), pages 97-114.
    13. Lafky, Jonathan & Wilson, Alistair J., 2020. "Experimenting with incentives for information transmission: Quantity versus quality," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 314-331.
    14. Wang, Siyu & Houser, Daniel, 2019. "Demanding or deferring? An experimental analysis of the economic value of communication with attitude," Games and Economic Behavior, Elsevier, vol. 115(C), pages 381-395.
    15. Zhou, Junya, 2023. "Costly verification and commitment in persuasion," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1100-1142.
    16. Wu, Wenhao & Ye, Bohan, 2023. "Competition in persuasion: An experiment," Games and Economic Behavior, Elsevier, vol. 138(C), pages 72-89.

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    More about this item

    Keywords

    Strategic information transmission; Multidimensional cheap talk; Fully revealing equilibrium; Robust equilibrium; 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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