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Common-Value Public Goods and Informational Social Dilemmas

Caleb Cox and Brock Stoddard ()

No 18-04, Working Papers from Department of Economics, Appalachian State University

Abstract: We experimentally examine the role of private information and communication in a public goods environment with uncertain returns. We consider a public goods game in which the Marginal Per Capita Return (MPCR) is either high or low. Before contributing, three players observe private signals correlated with the true MPCR and then send cheap talk messages to one another. There are social gains from truthful communication, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that messages are largely truthful and influence contribution decisions. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication Key Words: public goods, experiment, information, cheap talk, game theory, cooperation

JEL-codes: C72 D83 H41 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-exp and nep-gth
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