Working Paper No. 883

Credible Communication and Cooperation: Experimental Evidence from Multi-stage Games

Published: September 19, 2011Pages: 45Keywords: Communication; Cooperation; Renegotiation; ExperimentsJEL-codes: C72; C92
Published version

Credible Communication and Cooperation: Experimental Evidence from Multi-stage Games Ola Andersson and Erik Wengström

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. Pre-play communication only has a significant impact on cooperation when no intra-play communication is possible. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities.

Ola Andersson


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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