Words, Deeds and Lies: Strategic Behaviour in Games with Multiple Signals

J. Duffy, Nicholas J Feltovich

Research output: Contribution to journalArticle

45 Citations (Scopus)

Abstract

We report the results of an experiment in which subjects play games against changing opponents. In one treatment, "senders" send "receivers" messages indicating intended actions in that round, and receivers observe senders' previous-round actions (when matched with another receiver). In another treatment, the receiver additionally observes the sender's previous-round message to the previous opponent, enabling him to determine whether the sender had lied. We find that allowing multiple signals leads to better outcomes when signals are aligned (all pointing to the same action), but worse outcomes when signals are crossed. Also, senders' signals tend to be truthful, though the degree of truthfulness depends on the game and treatment, and receivers' behaviour combines elements of pay-off maximization and reciprocity.

Original languageEnglish
Pages (from-to)669-688
Number of pages19
JournalReview of Economic Studies
Volume73
Issue number3
DOIs
Publication statusPublished - Jul 2006

Keywords

  • cheap talk
  • communication
  • information
  • reputation
  • markets

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