Title

Cheap Talk with Multiple Audiences: an Experimental Analysis

Author(s)

Marco Battaglini Marco Battaglini (Princeton University)

Uliana Makarov Uliana Makarov (Princeton University)

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.

Creation Date

2012-07

Section URL ID

ET

Paper Number

wp012_2011_Battaglin_Makarov.pdf

URL

http://detc.princeton.edu/wp-content/uploads/2016/11/wp012_2011_Battaglin_Makarov.pdf

File Function

Jel

C72, C92, D82, C010, C700, D010, D030, C910

Keyword(s)

cheap talk, experiment

Suppress

false

Series

10