This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Journal: Microeconomics
  4. November 2020
  5. Information Transmission under the Shadow of the Future: An Experiment

Information Transmission under the Shadow of the Future: An Experiment

  • Alistair J. Wilson
  • Emanuel Vespa
American Economic Journal: Microeconomics
vol. 12, no. 4, November 2020
(pp. 75-98)
Download Full Text PDF

Abstract

We experimentally examine how information transmission functions in an ongoing relationship. Where the one-shot cheap-talk literature documents substantial overcommunication and preferences for honesty, the outcomes in our repeated setting are more consistent with uninformative babbling outcomes. This is particularly surprising, as honest revelation is supportable as an equilibrium outcome in our repeated setting. We show that inefficient outcomes are driven by a coordination failure on how to distribute the gains from information sharing. However, when agents can coordinate on the payment of an "information rent," honest revelation emerges.

Citation

Wilson, Alistair J., and Emanuel Vespa. 2020. "Information Transmission under the Shadow of the Future: An Experiment." American Economic Journal: Microeconomics, 12 (4): 75-98. DOI: 10.1257/mic.20170403

Additional Materials

JEL Classification

  • C92 Design of Experiments: Laboratory, Group Behavior
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
There are no comments for this article.
Login to Comment