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Common-Value Public Goods and Informational Social Dilemmas†

Common-Value Public Goods and Informational Social Dilemmas† AbstractWe experimentally examine private information and communication in a public goods environment with uncertain returns. We consider a common-value public goods game in which the return to contribution is either high or low. Before contributing, three players observe private signals correlated with the return and send cheap talk messages to one another. There are social gains from truthfulness, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that communication is largely truthful and increases efficiency. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication. (JEL C72, D82, D83, H41) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Common-Value Public Goods and Informational Social Dilemmas†

Common-Value Public Goods and Informational Social Dilemmas†

American Economic Journal: Microeconomics , Volume 13 (2) – May 1, 2021

Abstract

AbstractWe experimentally examine private information and communication in a public goods environment with uncertain returns. We consider a common-value public goods game in which the return to contribution is either high or low. Before contributing, three players observe private signals correlated with the return and send cheap talk messages to one another. There are social gains from truthfulness, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that communication is largely truthful and increases efficiency. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication. (JEL C72, D82, D83, H41)

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Publisher
American Economic Association
Copyright
Copyright © 2021 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20180275
Publisher site
See Article on Publisher Site

Abstract

AbstractWe experimentally examine private information and communication in a public goods environment with uncertain returns. We consider a common-value public goods game in which the return to contribution is either high or low. Before contributing, three players observe private signals correlated with the return and send cheap talk messages to one another. There are social gains from truthfulness, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that communication is largely truthful and increases efficiency. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication. (JEL C72, D82, D83, H41)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: May 1, 2021

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