IDEAS home Printed from https://ideas.repec.org/p/pot/cepadp/74.html
   My bibliography  Save this paper

Does communication increase the precision of beliefs?

Author

Listed:
  • Lisa Bruttel

    (University of Potsdam, CEPA)

  • Vasilisa Petrishcheva

    (University of Potsdam)

Abstract

In this paper, we study one channel through which communication may facilitate cooperative behavior – belief precision. In a prisoner’s dilemma experiment, we show that communication not only makes individuals more optimistic that their partner will cooperate but also increases the precision of this belief, thereby reducing strategic uncertainty. To disentangle the shift in mean beliefs from the increase in precision, we elicit beliefs and precision in a two-stage procedure and in three situations: without communication, before communication, and after communication. We find that the precision of beliefs increases during communication.

Suggested Citation

  • Lisa Bruttel & Vasilisa Petrishcheva, 2024. "Does communication increase the precision of beliefs?," CEPA Discussion Papers 74, Center for Economic Policy Analysis.
    • Handle: RePEc:pot:cepadp:74
    DOI: 10.25932/publishup-62936
    as

    Download full text from publisher

    File URL: https://doi.org/10.25932/publishup-62936
    Download Restriction: no
    File URL: https://libkey.io/10.25932/publishup-62936?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
    ---><---

    References listed on IDEAS

    as
    1. Stefan T. Trautmann & Gijs Kuilen, 2015. "Belief Elicitation: A Horse Race among Truth Serums," Economic Journal, Royal Economic Society, vol. 125(589), pages 2116-2135, December.
    2. Charles A. Holt & Angela M. Smith, 2016. "Belief Elicitation with a Synchronized Lottery Choice Menu That Is Invariant to Risk Attitudes," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 110-139, February.
    Full references (including those not matched with items on IDEAS)

    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. Dominik Bauer & Irenaeus Wolff, 2018. "Biases in Beliefs: Experimental Evidence," TWI Research Paper Series 109, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    2. Folli, Dominik & Wolff, Irenaeus, 2022. "Biases in belief reports," Journal of Economic Psychology, Elsevier, vol. 88(C).
    3. Bauer, Dominik & Wolff, Irenaeus, 2019. "Biases in Beliefs," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203601, Verein für Socialpolitik / German Economic Association.
    4. Erkal, Nisvan & Gangadharan, Lata & Koh, Boon Han, 2020. "Replication: Belief elicitation with quadratic and binarized scoring rules," Journal of Economic Psychology, Elsevier, vol. 81(C).
    5. Ingrid Burfurd & Tom Wilkening, 2018. "Experimental guidance for eliciting beliefs with the Stochastic Becker–DeGroot–Marschak mechanism," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 4(1), pages 15-28, July.
    6. Lata Gangadharan & Philip J. Grossman & Nina Xue, 2021. "Identifying self-image concerns from motivated beliefs: Does it matter how and whom you ask?," Monash Economics Working Papers 2021-17, Monash University, Department of Economics.
    7. Burdea, Valeria & Woon, Jonathan, 2022. "Online belief elicitation methods," Journal of Economic Psychology, Elsevier, vol. 90(C).
    8. Lata Gangadharan & Philip J. Grossman & Nina Xue, 2022. "Stepping Stone: Identifying self-image concerns from motivated beliefs: Does it matter how and whom you ask?," Monash Economics Working Papers 2022-05, Monash University, Department of Economics.
    9. Eyting, Markus & Schmidt, Patrick, 2021. "Belief elicitation with multiple point predictions," European Economic Review, Elsevier, vol. 135(C).
    10. Daniel Agness & Travis Baseler & Sylvain Chassang & Pascaline Dupas & Erik Snowberg, 2022. "Valuing the Time of the Self-Employed," Working Papers 2022-2, Princeton University. Economics Department..
    11. Armantier, Olivier & Treich, Nicolas, 2013. "Eliciting beliefs: Proper scoring rules, incentives, stakes and hedging," European Economic Review, Elsevier, vol. 62(C), pages 17-40.
    12. Philippe Aghion & Ernst Fehr & Richard Holden & Tom Wilkening, 2018. "The Role of Bounded Rationality and Imperfect Information in Subgame Perfect Implementation—An Empirical Investigation," Journal of the European Economic Association, European Economic Association, vol. 16(1), pages 232-274.
    13. Kyle Hyndman & Antoine Terracol & Jonathan Vaksmann, 2022. "Beliefs and (in)stability in normal-form games," Experimental Economics, Springer;Economic Science Association, vol. 25(4), pages 1146-1172, September.
    14. Mohammed Abdellaoui & Han Bleichrodt & Cédric Gutierrez, 2023. "Unpacking Overconfident Behavior When Betting on Oneself," Post-Print hal-04383402, HAL.
    15. Ganglmair, Bernhard & Holcomb, Alex & Myung, Noah, 2016. "Cutthroats or comrades: Information sharing among competing fund managers," MPRA Paper 71506, University Library of Munich, Germany.
    16. Grewenig, Elisabeth & Lergetporer, Philipp & Werner, Katharina & Woessmann, Ludger, 2022. "Incentives, search engines, and the elicitation of subjective beliefs: Evidence from representative online survey experiments," Journal of Econometrics, Elsevier, vol. 231(1), pages 304-326.
    17. Gee, Laura K. & Schreck, Michael J., 2018. "Do beliefs about peers matter for donation matching? Experiments in the field and laboratory," Games and Economic Behavior, Elsevier, vol. 107(C), pages 282-297.
    18. González-Jiménez, Víctor, 2022. "Social status and motivated beliefs," Journal of Public Economics, Elsevier, vol. 211(C).
    19. Raphael Guber & Martin G. Kocher & Joachim Winter, 2021. "Does having insurance change individuals' self‐confidence?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(2), pages 429-442, June.
    20. Gächter, Simon & Lee, Kyeongtae & Sefton, Martin & Weber, Till O., 2024. "The role of payoff parameters for cooperation in the one-shot Prisoner's Dilemma," European Economic Review, Elsevier, vol. 166(C).

    More about this item

    Keywords

    prisoner’s dilemma; communication; beliefs; strategic uncertainty; experiment;
    All these keywords.

    JEL classification:

    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pot:cepadp:74. 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: Marco Winkler (email available below). General contact details of provider: https://edirc.repec.org/data/cepotde.html .

    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.