Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87239
Authors: 
de Groot Ruiz, Adrian
Offerman, Theo
Onderstal, Sander
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-153/1
Abstract: 
We test the Average Credible Deviation Criterion (ACDC), a stability measure and refinement for cheap talk equilibria introduced in De Groot Ruiz, Offerman & Onderstal (2011b). ACDC has been shown to be predictive under general conditions and to organize data well in previous experiments meant to test other concepts. This experiment provides the first systematic test of whether and to which degree credible deviations matter for the stability of cheap talk equilibria. Furthermore, it tests ACDC in a new setting. We also introduce a neologism dynamic to explain the main dynamic characteristics of our data. Our main result is that credible deviations matter and matter gradually, as predicted by ACDC. In addition, our data support the predictions of ACDC in settings where existing concepts are silent. Finally, we test the prediction derived in De Groot Ruiz, Offerman & Onderstal (2011a) about bargaining power and information transmission. We find that, as predicted, less information is transmitted as the Sender's relative power decreases.
Subjects: 
Cheap Talk
Refinement
Selection
Experiment
Neologism Proofness
Announcement Proofness
ACDC
JEL: 
C72
C92
D82
D83
Document Type: 
Working Paper

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