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Title:Noisy commitments: the impact of information accuracy on efficiency PDF Logo
Authors:Ert, Eyal
Nicklisch, Andreas
Issue Date:2006
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2006,4
Abstract:We report an experiment designed to test the influence of noisy commitments on efficiency in a simple bargaining game. We investigate two different levels of commitment reliability in a variant of the peasant-dictator game. Theoretical analysis suggests that the reliability of commitments in this game does not affect efficiency. We find that accurate commitments promote efficiency, as expected by game theory. However, noisy commitments are found to impair efficiency. We explain this effect by the differences between incentives off the equilibrium path under conditions of accurate commitments and noisy commitments. This difference changes the game structure and in the current game facilitates more random responses.
Subjects:Commitments
efficiency
experimental economics
information
trust
JEL:C7
C91
L15
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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