Cheap Talk with Multiple Audiences: An Experimental Analysis

46 Pages Posted: 19 Mar 2011 Last revised: 14 Oct 2012

See all articles by Marco Battaglini

Marco Battaglini

Princeton University - Department of Economics; Centre for Economic Policy Research (CEPR)

Uliana Makarov

Princeton University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 10, 2012

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. There is evidence of the presence of agents that are systematically truthful as senders and trusting as receivers: deviations from the theoretical predictions, however, tend to disappear with experience, and learning is faster precisely in the games where deviations are more pronounced.

JEL Classification: C72, C92, D82

Suggested Citation

Battaglini, Marco and Makarov, Uliana, Cheap Talk with Multiple Audiences: An Experimental Analysis (July 10, 2012). Economic Theory Center Working Paper No. 012-2011, Available at SSRN: https://ssrn.com/abstract=1789794 or http://dx.doi.org/10.2139/ssrn.1789794

Marco Battaglini (Contact Author)

Princeton University - Department of Economics ( email )

213 Fisher Hall
Princeton, NJ 08544
United States
609-258-4002 (Phone)
609-258-6419 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Uliana Makarov

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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