Credible communication and cooperation: Experimental evidence from multi-stage Games

Andersson, OlaLund University,Lunds universitet,Uppsala universitet,Nationalekonomiska institutionen,Ekonomihögskolan,Department of Economics,Lund University School of Economics and Management, LUSEM (author)

It is well known that communication often serves as a facilitator for cooperation in static games. Yet, communication can serve entirely different purposes in dynamic settings as communication during the game may work as a means for renegotiation, potentially undermining the credibility of cooperative strategies. To explore this issue, this paper experimentally investigates cooperation and non-binding communication in a two-stage game. More specifically, two treatments are considered: one with only pre-play communication and one where subjects can also communicate intra-play between the stages of the game. The results highlight a nontrivial difference concerning the effects of pre-play communication between the two treatments. Sending or receiving pre-play messages has a positive and significant effect on cooperation if there is no possibility of intra-play communication. However, this effect is significantly reduced when when intra-play communication is allowed. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities.

Wengström, ErikLund University,Lunds universitet,Nationalekonomiska institutionen,Ekonomihögskolan,Department of Economics,Lund University School of Economics and Management, LUSEM(Swepub:lu)nek-ewe (author)
Uppsala universitetNationalekonomiska institutionen (creator_code:org_t)

In:Journal of Economic Behavior and Organization: Elsevier BV81:1, s. 207-2190167-26811879-1751

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