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Strategic Reasoning in Persuasion Games: An Experiment

Author

Listed:
  • Burkhard Schipper
  • Ying Xue Li

    (Department of Economics, University of California Davis)

Abstract
We study experimentally persuasion games in which a sender (e.g., a seller) with private information provides verifiable but potentially vague information (e.g., about the quality of a product) to a receiver (e.g., a buyer). Various theoretical solution concepts such as sequential equilibrium or iterated admissibility predict unraveling of information. Iterative admissibility also provides predictions for every finite level of reasoning about rationality. Overall we observe behavior consistent with relatively high levels of reasoning. While iterative admissibility implies that the level of reasoning required for unraveling is increasing in the number of quality levels, we find only insignificantly more unraveling in a game with two quality levels compared to a game with four quality levels. There is weak evidence for learning higher-level reasoning in later rounds of the experiments. Participants display difficulties in transferring learning to unravel in a game with two quality levels to a game with four quality levels. Finally, participants who score higher on cognitive abilities in Raven's progressive matrices test also display significantly higher levels of reasoning in our persuasion games although the effect-size is small.

Suggested Citation

  • Burkhard Schipper & Ying Xue Li, 2018. "Strategic Reasoning in Persuasion Games: An Experiment," Working Papers 111, University of California, Davis, Department of Economics.
    • Handle: RePEc:cda:wpaper:111
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Chloe Tergiman & Marie Claire Villeval, 2023. "The Way People Lie in Markets: Detectable vs. Deniable Lies," Management Science, INFORMS, vol. 69(6), pages 3340-3357, June.
    2. Deversi, Marvin & Ispano, Alessandro & Schwardmann, Peter, 2021. "Spin doctors: An experiment on vague disclosure," European Economic Review, Elsevier, vol. 139(C).
    3. Hagenbach, Jeanne & Perez-Richet, Eduardo, 2018. "Communication with evidence in the lab," Games and Economic Behavior, Elsevier, vol. 112(C), pages 139-165.
    4. 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.
    5. Kamei, Kenju, 2020. "Voluntary disclosure of information and cooperation in simultaneous-move economic interactions," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 234-246.
    6. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," SciencePo Working papers Main hal-03770685, HAL.
    7. Martin Meier & Burkhard C. Schipper, 2022. "Conditional dominance in games with unawareness," Working Papers 351, University of California, Davis, Department of Economics.
    8. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Working Papers hal-03770685, HAL.
    9. Jesal Sheth, 2019. "Disclosure of information under competition: An experimental study," Discussion Papers 2019-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    10. Daniel H. Wood, 2022. "Communication-Enhancing Vagueness," Games, MDPI, vol. 13(4), pages 1-27, June.
    11. Ginger Zhe Jin & Michael Luca & Daniel Martin, 2022. "Complex Disclosure," Management Science, INFORMS, vol. 68(5), pages 3236-3261, May.
    12. Burkhard C. Schipper & Hang Zhou, 2022. "Level-k Thinking in the Extensive Form," Working Papers 352, University of California, Davis, Department of Economics.
    13. Jeanne Hagenbach & Charlotte Saucet, 2024. "Motivated Skepticism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03770685, HAL.
    14. Sheth, Jesal D., 2021. "Disclosure of information under competition: An experimental study," Games and Economic Behavior, Elsevier, vol. 129(C), pages 158-180.
    15. Tom Lane & Minghai Zhou, 2022. "Failure of unravelling theory? A natural field experiment on voluntary quality disclosure," Discussion Papers 2022-17, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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    More about this item

    Keywords

    Persuasion games; verifiable information; communication; disclosure; unraveling; iterated admissibility; prudent rationalizability; common strong cautious belief in rationality; level-k reasoning; experiments; cognitive ability.;
    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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