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An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games

Gary Charness (), Francesco Feri (), Miguel A. Meléndez-Jiménez () and Matthias Sutter ()
Additional contact information
Francesco Feri: Royal Holloway University of London and University of Trieste
Miguel A. Meléndez-Jiménez: Universidad de Málaga

No 2019_08, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: The effectiveness of social interaction depends strongly on an ability to coordinate actions efficiently. In large networks, such coordination may be very difficult to achieve and may depend on the communication technology and the network structure. We examine how pre-play communication and clustering within networks affect coordination in a challenging experimental game on eight-person networks. Free-form chat is enormously effective in achieving the non-equilibrium efficient outcome in our game, but restricted communication (where subjects can only indicate their intended action) is almost entirely ineffective. We can rationalize this result with a novel model about the credibility of cheap-talk messages. This credibility is much larger with free-form message communication than with restricted communication. We are the first to model this credibility and show, both theoretically and experimentally, an interaction effect of network structure and communication technologies. We also provide a model of message diffusion, which indeed predicts that diffusion will be more rapid without clustering and is consistent with our data.

Keywords: Networks; Clustering; Communication; Credibility; Cheap talk; Experiment (search for similar items in EconPapers)
JEL-codes: C71 C91 D03 D85 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth, nep-ict and nep-ure
Date: 2019-05
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Working Paper: An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games (2019) Downloads
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