Cheap talk and cooperation in Stackelberg games
Research output: Contribution to journal › Article › Scientific › peer-review
Previous literature on cheap talk suggests that it is used to increase cooperation. We study cheap talk and the effect of the leader’s private payoff information in new repeated Stackelberg game settings. Our results confirm earlier studies that the players cooperate in repeated Stackelberg games with complete payoff information. In the cheap talk setting the follower has the actual first mover advantage and should in theory benefit from it, but we find that many followers cooperate instead. Similarly, many leaders do not use cheap talk for cheating but commit to symmetric joint-optimum quantities. The leader’s private payoff information results in a low frequency of cooperation but in the presence of cheap talk players do cooperate.
|Number of pages||25|
|Journal||CENTRAL EUROPEAN JOURNAL OF OPERATIONS RESEARCH|
|Publication status||Published - Jun 2017|
|MoE publication type||A1 Journal article-refereed|
- Cheap talk, Cooperation, Experiments, Private information, Stackelberg game