Which Words Bond? An Experiment on Signaling in a Public Good Game (replaced by CentER DP 2011-139)
M. Serra Garcia,
Eric van Damme and
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M. Serra Garcia: Tilburg University, Center For Economic Research
No 2010-33, Discussion Paper from Tilburg University, Center for Economic Research
We compare signaling by words and actions in a one-shot 2-person public good game with private information. The informed player, who knows the exact return from contributing, can signal by contributing first (actions) or by sending a costless message (words). Words can be about the return or about her contribution decision. Theoretically, actions lead to fully e¢ cient contributions. Words can be as influential as actions, and thus elicit the uninformed player's contribution, but allow the informed player to free-ride. The exact language used is not expected to matter. Experimentally, we find that words can be as influential as actions. Free-riding, however, does depend on the language: the informed player free-rides less when she talks about her contribution than when she talks about the returns.
Keywords: Information transmission; costly signaling; communication; experiment (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
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