The Role of Theory of Mind and “Small Talk” Communication in Strategic Decision-Making

Neha Bose and Daniel Sgroi
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Neha Bose: University of Warwick

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Humans routinely chat with each other about many things like the news, weather or sports. In important decision-making settings, informal communication of this sort (so-called “small talk”) has been largely dismissed by social scientists as wasteful and strategically empty. We provide new evidence that this is far from true: after a 4- minute conversation, subjects developed a sense of the personality of others which in a pre-registered RCT resulted in significantly different behaviour in future interactions. They contributed more in public good games and found it more difficult to out-guess opponents they felt were like themselves. We explain this behaviour, and using textanalysis, measure the direct impact of differences in language: for example, talking more made subjects seem more pro-social, engendering pro-social behaviour in others.

Keywords: theory of mind; cheap talk; communication; level-k reasoning; public goods game; cooperation; extraversion; perceived similarity; self-projection bias; laboratory experiment; text analysis. JEL Classification: D91; D83; C92. (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-neu
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:409

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