American Economic Review: Vol. 101 No. 4 (June 2011)


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Article Citation

Charness, Gary, and Martin Dufwenberg. 2011. "Participation." American Economic Review, 101(4): 1211-37.

DOI: 10.1257/aer.101.4.1211


We show experimentally that whether and how communication achieves beneficial social outcomes in a hidden-information context depends crucially on whether low-talent agents can participate in a Pareto-improving outcome. Communication is effective (and patterns of lies and truth quite systematic) when this is feasible, but otherwise completely ineffective. We examine the data in light of two potentially relevant behavioral models: cost-of-lying and guilt-fromblame. (JEL D82, D83, Z13)

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Charness, Gary (U CA, Santa Barbara and CESifo, U Munich)
Dufwenberg, Martin (U AZ and U Gothenburg)

JEL Classifications

D82: Asymmetric and Private Information
D83: Search; Learning; Information and Knowledge; Communication; Belief
Z13: Economic Sociology; Economic Anthropology; Social and Economic Stratification

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