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Cheap talk

Author(s): 
Toshiji Kawagoe and Hirokazu Takizawa
Date: 
Wed, 2007-08-01
Abstract: 

We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms "truth bias" reported in communication theory in a one-shot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.

Author(s): 
Toshiji Kawagoe and Hirokazu Takizawa
Date: 
Mon, 2008-03-10
Abstract: 

We present the experimental results of cheap-talk games with private information. We systematically compare various equilibrium refinement theories and bounded rationality models such as level-k analysis in explaining our experimental data. As in the previous literature, we find that when interests between sender and receiver are aligned, informative communication arises frequently. While babbling equilibrium play is observed more frequently in conflictive interest cases, a substantial number of players show a tendency to choose truth-telling and credulous play. We also find that level-k analysis outperforms equilibrium refinement theories in explaining this phenomenon. Our results also confirm the existence of the “truth bias” and “truth-detection bias” reported in communication theory.