Can there be a market for cheap-talk information? Some experimental evidence

Piero Gottardi, Meléndez-Jiménez, Miguel A. and Francesco Feri
Authors registered in the RePEc Author Service: Antonio Cabrales and Miguel Ángel Meléndez-Jiménez ()

No 11206, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper reports on experiments testing the viability of markets for cheap talk information. We find that these markets are fragile. The reasons are surprising given the previous experimental results on cheap-talk games. Our subjects provide low-quality information even when doing so does not increase their monetary payoff. We show that this is not because subjects play a different (babbling) equilibrium. By analyzing subjects’ behavior in another game, we find that those adopting deceptive strategies tend to have envious or non-pro-social traits. The poor quality of the information transmitted leads to a collapse of information markets.

Keywords: Experiment; Cheap talk; Auction; Information acquisition; Information sale (search for similar items in EconPapers)
JEL-codes: C72 D83 G14 (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-exp, nep-gth, nep-pke and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: Can there be a market for cheap-talk information? Some experimental evidence (2016)
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