‘I’m Just a Soul Whose Intentions Are Good’: The Role of Communication in Noisy Repeated Games
56 Pages Posted: 18 Mar 2016 Last revised: 3 Mar 2017
Date Written: March 2, 2017
We let participants indicate their intended action in a repeated game experiment where actions are implemented with errors. Even though communication is cheap talk, we find that the majority of messages were honest (although the majority of participants lied at least occasionally). As a result, communication has a positive effect on cooperation when the payoff matrix makes the returns to cooperation high; when the payoff matrix gives a lower return to cooperation, communication reduces overall cooperation. These results suggest that cheap talk communication can promote cooperation in repeated games, but only when there is already a self-interested motivation to cooperate.
Keywords: repeated games, prisoner's dilemma, experimental economics, economic games, communication
JEL Classification: C70, C90, C91
Suggested Citation: Suggested Citation