An Experimental Study of Credible Deviations and ACDC

Tinbergen Institute Discussion Paper No. 11-153/1

68 Pages Posted: 5 Nov 2011 Last revised: 27 Nov 2012

See all articles by Adrian de Groot Ruiz

Adrian de Groot Ruiz

University of Amsterdam - Faculty of Economics and Business (FEB)

T. J. S. Offerman

University of Amsterdam - Faculty of Economics and Business (FEB); Tinbergen Institute

Sander Onderstal

University of Amsterdam; Tinbergen Institute

Date Written: September 12, 2012

Abstract

We test the Average Credible Deviation Criterion (ACDC), a stability measure and refinement for cheap talk equilibria introduced in De Groot Ruiz, Offerman & Onderstal (2012a). ACDC has been shown to be predictive under general conditions and to organize data well in previous experiments meant to test other concepts. In a new experimental setting, we provide the first systematic test of whether and to which degree credible deviations matter for the stability of cheap talk equilibria. Our principal experimental result is that in a setting where existing concepts are silent, credible deviations matter and matter gradually, as predicted by ACDC.

Keywords: cheap talk, refinement, selection, experiment, neologism proofness, announcement proofness, ACDC

JEL Classification: C72, C92, D82, D83

Suggested Citation

de Groot Ruiz, Adrian and Offerman, T. J. S. and Onderstal, Sander, An Experimental Study of Credible Deviations and ACDC (September 12, 2012). Tinbergen Institute Discussion Paper No. 11-153/1, Available at SSRN: https://ssrn.com/abstract=1954586 or http://dx.doi.org/10.2139/ssrn.1954586

Adrian De Groot Ruiz (Contact Author)

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

T. J. S. Offerman

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Sander Onderstal

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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