Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81410
Authors: 
Andersson, Ola
Wengström, Erik
Year of Publication: 
2011
Series/Report no.: 
IFN Working Paper 883
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 intra-play communication is possible. The results suggest that the credibility of pre-play messages may depend crucially on future communication opportunities.
Subjects: 
Communication
Cooperation
Renegotiation
Experiments
JEL: 
C72
C92
Document Type: 
Working Paper

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