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Overcommunication in strategic information transmission games. (English) Zbl 1150.91008
Summary: In this paper we conduct laboratory experiments to test the Crawford and Sobel [V. P. Crawford and J. Sobel, Econometrica 50, 1431–1451 (1982; Zbl 0494.94007)] theory of strategic information transmission. Our experimental results strongly support the basic insight of the theory, namely, that less information is transmitted when preferences of the sender and the receiver diverge. Moreover, the average payoffs for the senders, the receivers, and the overall subject population are very close to those predicted by the most informative equilibrium. However, the evidence shows that subjects consistently overcommunicate in that the senders’ messages are more informative about the true states of the world and that the receivers rely more on the senders’ messages in choosing actions, compared with what the theory allows in the most informative equilibrium. To understand the overcommunication phenomenon, we use two popular approaches of bounded rationality: behavior type analysis and quantal response equilibrium, to analyze subjects’ behavior in our experiment data.

MSC:
91A90 Experimental studies
91A10 Noncooperative games
91A26 Rationality and learning in game theory
91A28 Signaling and communication in game theory
Software:
Z-Tree
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