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Cheap Talk with Two Audiences: An Experiment

Author

Listed:
  • Mikhail Drugov

    (Universidad Carlos III de Madrid, University of Warwick and CEPR)

  • Roberto Hernán-González

    (Departamento de Teoría e Historia Económica, Universidad de Granada)

  • Praveen Kujal

    (Middlesex University Business School)

  • Marta Troya Martinez

    (Department of Economics, University of Oxford)

Abstract

In this paper we experimentally test strategic information transmission between one informed and two uninformed agents in a cheap-talk game. We find evidence of the "disciplining" effect of public communication as compared to private; however, it is much weaker than predicted by the theory. Adding a second receiver naturally increases the complexity of strategic thinking when communication is public. Using the level-k model, we exploit the within subject design to show how individuals decrease their level-k in public communication. Surprisingly, we find that individuals become more sophisticated when they communicate privately with two receivers rather than one.

Suggested Citation

  • Mikhail Drugov & Roberto Hernán-González & Praveen Kujal & Marta Troya Martinez, 2013. "Cheap Talk with Two Audiences: An Experiment," Working Papers 13-32, Chapman University, Economic Science Institute.
    • Handle: RePEc:chu:wpaper:13-32
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    File URL: http://www.chapman.edu/research-and-institutions/economic-science-institute/_files/WorkingPapers/cheap-talk-with-two-audiences-an-experiment.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Altmann, Steffen & Falk, Armin & Grunewald, Andreas, 2013. "Incentives and Information as Driving Forces of Default Effects," IZA Discussion Papers 7610, Institute of Labor Economics (IZA).
    2. van Gils, Freek & Müller, Wieland & Prüfer, Jens, 2020. "Big Data and Democracy," Discussion Paper 2020-003, Tilburg University, Tilburg Law and Economic Center.
    3. Xinyu Li & Ronald Peeters, 2016. "Cheap Talk with Multiple Strategically Interacting Audiences: An Experimental Study," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-14, October.
    4. 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.

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    More about this item

    Keywords

    Cheap Talk; Communication; Experiment; Level-k; Cognitive ability; Cognitive Reflection Test;
    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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