For those about to talk we salute you: an experimental study of credible deviations and ACDC

• Published in: Experimental economics : a journal of the Economic Science Association Vol. 17; no. 2; pp. 173 - 199
• Main Authors: de Groot Ruiz, Adrian, Offerman, Theo, Onderstal, Sander
• Format: Journal Article
• Language: English
• Published: Boston Springer US 01.06.2014; Springer Nature B.V
• Subjects: Behavioral/Experimental Economics; Communication; Deviation; Economic models; Economic statistics; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Equilibrium; Experiments; Forecasts; Game Theory; Games; Microeconomics; Netherlands; Operations Research/Decision Theory; Social and Behav. Sciences; Studies; Universities; Working papers; Neologism proofness; Selection; Experiment; Announcement proofness; Refinement; Cheap talk; C92; D83; ACDC; C72; D82
• ISSN: 1386-4157; 1573-6938
• DOI: 10.1007/s10683-013-9362-z

We test the Average Credible Deviation Criterion (ACDC), a stability measure and refinement for cheap talk equilibria introduced in De Groot Ruiz et al. (Equilibrium selection in cheap talk games: ACDC rocks when other criteria remain silent, Working paper, University of Amsterdam 2012a ). ACDC has been shown to be predictive under general conditions and to organize data well in previous experiments meant to test other concepts. In a new experimental setting, we provide the first systematic test of whether and to which degree credible deviations matter for the stability of cheap talk equilibria. Our principal experimental result is that in a setting where existing concepts are silent, credible deviations matter and matter gradually, as predicted by ACDC.