Cheap talk and cooperation in Stackelberg games

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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
Date
2017-06
Major/Subject
Mcode
Degree programme
Language
en
Pages
25
261–285
Series
CENTRAL EUROPEAN JOURNAL OF OPERATIONS RESEARCH, Volume 25, issue 2
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.
Description
Keywords
Cheap talk, Cooperation, Experiments, Private information, Stackelberg game
Other note
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