Let it Flow: Information Exchange in Video Conferences versus Face-to-Face Meetings

Abstract

The COVID-19 pandemic has dramatically changed how people interact with one another. Due to social distancing policies, interactions that traditionally occur in-person have largely transitioned into virtual alternatives. This shift raises an intriguing question: are virtual communications a viable alternative for face-to-face meetings?

We investigate this experimentally by contrasting face-to-face meetings (FtF) and video conferences (VC) in the context of an information-flow task. In the experiment, the subjects need to solve a riddle based on a set of clues, which help narrow down the set of options but are not enough to solve the riddle correctly. However, each subject can invest money to increase the probability of communicating with another subject before attempting to solve the riddle. Successful communications enable subjects to easily solve the riddle, as each communicating pair holds complementary clues. Thus, if the information is exchanged effectively, subjects’ performance should be high.

Varying the medium (FtF or VC) available for communication, we find that while the performance in the task itself does not depend on the medium, subjects do display significant differences in their willingness to invest, ex-ante beliefs, and ex-post reporting on the exchange of information during communication. Particularly, age plays an important role: Younger subjects are more optimistic about the prospect of virtual meetings, but less likely to invest their endowment. We relate our findings to several real-world settings and discuss implications for legal policy.

Keywords: face-to-face, video conference, virtual teams, social distancing, COVID-19, communication, information flow

JEL Classification: D02, D23, D83, K20, O39