Cheap talk and cooperation in Stackelberg games

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A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Date

2017-06

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Department of Mathematics and Systems Analysis

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Language

en

Pages

25

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Central European Journal of Operations Research, Volume 25, issue 2, pp. 261–285

Abstract

Previous literature on cheap talk suggests that it is used to increase cooperation. We study cheap talk and the effect of the leader’s private payoff information in new repeated Stackelberg game settings. Our results confirm earlier studies that the players cooperate in repeated Stackelberg games with complete payoff information. In the cheap talk setting the follower has the actual first mover advantage and should in theory benefit from it, but we find that many followers cooperate instead. Similarly, many leaders do not use cheap talk for cheating but commit to symmetric joint-optimum quantities. The leader’s private payoff information results in a low frequency of cooperation but in the presence of cheap talk players do cooperate.

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Keywords

Cheap talk, Cooperation, Experiments, Private information, Stackelberg game

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DOI

10.1007/s10100-016-0444-9

Citation

Hämäläinen, R P & Leppänen, I 2017, 'Cheap talk and cooperation in Stackelberg games', Central European Journal of Operations Research, vol. 25, no. 2, pp. 261–285. https://doi.org/10.1007/s10100-016-0444-9

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https://urn.fi/URN:NBN:fi:aalto-202105056497

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[article-cris] Perustieteiden korkeakoulu / SCI