Abstract
This paper deals with the effects of different modes of communication in a costless information transmission environment with multiple senders. To this aim, we present a theoretical and experimental study of three Cheap Talk games, each having two senders and one receiver. The communication of senders is simultaneous in the first, sequential in the second and determined by the receiver in the third game (the Choice Game). We find that the overcommunication phenomenon observed with only one sender becomes insignificant in our two-sender model regardless of the mode of communication. However, as to the excessive trust of the receiver, our results are not distinguished from those in the one-sender model. Regarding the Choice Game, our logistic regressions on experimental results suggest that the receiver is more likely to select simultaneous play if the previous play was simultaneous and the receiver earned the high payoff and much more likely to select simultaneous play if the messages were nonconflicting.
Highlights
A recent experimental literature analyzes information transmission in a class of sender–receiver games in which the only equilibrium is babbling; i.e., communication is not informative
We study the effects of different modes of communication in a costless information transmission environment with two senders
Our model investigates a case with two senders to experimentally identify the effects of different modes of communication on the truth-telling of the senders and the trust of the receiver
Summary
A recent experimental literature analyzes information transmission in a class of sender–receiver games in which the only equilibrium is babbling; i.e., communication is not informative In these games, a sender privately observes Nature’s realization of a conflicting payoff table that could be of two likely types. Minozzi and Woon [23] analyze the effect of having a second sender in a sequential cheap talk game taking into account differences in alignment of preferences of the senders and receiver. Our model investigates a case with two senders (where the essentially unique equilibrium is babbling) to experimentally identify the effects of different modes of communication on the truth-telling of the senders and the trust of the receiver. They show that excessive truth-telling and excessive trust are higher under intervention than under the absence of intervention
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