Negotiating Cooperation under Uncertainty: Communication in Noisy, Indefinitely Repeated Interactions

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2024
Volume: 16
Issue: 3
Pages: 232-58

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Case studies of cartels and recent theory suggest that communication is a key factor for cooperation under imperfect monitoring, where actions can only be observed with noise. We conduct a laboratory experiment to study how communication affects cooperation under different monitoring structures. Pre-play communication reduces strategic uncertainty and facilitates very high cooperation rates at the beginning of an interaction. Under perfect monitoring, this is sufficient to reach a high and stable cooperation rate. However, repeated communication is important to maintain a high level of cooperation under imperfect monitoring, where players face additional uncertainty about the history of play.

Technical Details

RePEc Handle
repec:aea:aejmic:v:16:y:2024:i:3:p:232-58
Journal Field
General
Author Count
2
Added to Database
2026-01-25