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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Interdisciplinary European Studies

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