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Cheap Talk with Multiple Audiences: an Experimental Analysis

Author

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  • Battaglini, Marco
  • Makarov, Uliana
Abstract
We examine strategic information transmission in a controlled laboratory experiment of a cheap talk game with one sender and multiple receivers. We study the change in equilibrium behavior from the addition of another audience as well as from varying the degree of conflict between the sender's and receivers' preferences. We find that, as in cheap talk games with just one receiver, information transmission is higher in games with a separating equilibrium, than in games with only a babbling equilibrium. More interestingly, we find clear evidence that the addition of another audience alters the communication between the sender and the receiver in a way consistent with the theoretical predictions. Deviations from the theoretical predictions that we observe tend to disappear with experience, and learning is faster precisely in the games where deviations are more pronounced.

Suggested Citation

  • Battaglini, Marco & Makarov, Uliana, 2010. "Cheap Talk with Multiple Audiences: an Experimental Analysis," CEPR Discussion Papers 8146, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8146
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. 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.
    3. Marco Battaglini & Rebecca B. Morton & Eleonora Patacchini, 2020. "Social Groups and the Effectiveness of Protests," Working Papers 20200039, New York University Abu Dhabi, Department of Social Science, revised Feb 2020.
    4. Hagenbach, Jeanne & Perez-Richet, Eduardo, 2018. "Communication with evidence in the lab," Games and Economic Behavior, Elsevier, vol. 112(C), pages 139-165.
    5. Daniel Habermacher, 2022. "Authority and Specialization under Informational Interdependence," Working Papers 142, Red Nacional de Investigadores en Economía (RedNIE).
    6. Sebastian Fehrler & Niall Hughes, 2018. "How Transparency Kills Information Aggregation: Theory and Experiment," American Economic Journal: Microeconomics, American Economic Association, vol. 10(1), pages 181-209, February.
    7. 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.
    8. Gilles Grandjean & Marco Mantovani & Ana Mauleon & Vincent Vannetelbosch, 2014. "Whom are you talking with? An experiment on credibility and communication structure," Working Papers 285, University of Milano-Bicocca, Department of Economics, revised Oct 2014.
    9. Jonathan Lafky & Alistair J. Wilson, 2015. "Quality vs. Quantity in Information Transmission: Theory and Experimental Evidence," CESifo Working Paper Series 5426, CESifo.
    10. repec:hum:wpaper:sfb649dp2014-064 is not listed on IDEAS
    11. Hu, Youxin & Kagel, John & Yang, Huanxing & Zhang, Lan, 2020. "The effects of pre-play communication in a coordination game with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 403-415.
    12. Alex Farnell, 2023. "False Start? An Analysis of NFL Penalties With and Without Crowds," Journal of Sports Economics, , vol. 24(6), pages 695-716, August.
    13. Grandjean, Gilles & Mantovani, Marco & Mauleon, Ana & Vannetelbosch, Vincent, 2017. "Communication structure and coalition-proofness – Experimental evidence," European Economic Review, Elsevier, vol. 94(C), pages 90-102.
    14. 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).
    15. Fehrler, Sebastian & Hahn, Volker, 2020. "Committee Decision-Making under the Threat of Leaks," IZA Discussion Papers 13746, Institute of Labor Economics (IZA).
    16. 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.
    17. 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.
    18. 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.
    19. 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.
    20. Daniel Habermacher, 2022. "Information Aggregation in Multidimensional Cheap Talk," Working Papers 169, Red Nacional de Investigadores en Economía (RedNIE).
    21. Groseclose, Tim, 2021. "Do humans rationally discount biased signals? Evidence from the Crawford-Sobel Game," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 306-317.
    22. 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.
    23. Jonathan Lafky & Alistair Wilson, 2018. "Quantity Versus Quality: Experimenting with the Margins for Social Information," Working Papers 2018-02, Carleton College, Department of Economics.

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    More about this item

    Keywords

    Cheap talk; Communication; Experiment;
    All these keywords.

    JEL classification:

    • 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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