More Communication, Less Cooperation: Experimental Evidence from Multi-stage Games

No 2007:4, Working Papers from Lund University, Department of Economics

Abstract: 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 intraplay communication is possible. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities.

Keywords: Renegotiation; Communication; Cooperation; Experiments (search for similar items in EconPapers)
JEL-codes: C72 C92 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2007-02-21, Revised 2010-11-24
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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