An Experimental Study on the Effects of Communication, Credibility, and Clustering in Network Games

Abstract We examine how preplay communication and clustering affect play in a challenging hybrid experimental game on networks. Free-form chat is impressively effective in achieving the nonequilibrium efficient outcome, but restricted communication has little effect. We support this result with a model about the credibility of cheap-talk messages. We also offer a model of message diffusion that correctly predicts more rapid diffusion without clustering. We show an interaction effect of network structure and communication technologies. A remarkable result is that restricted communication is quite effective in a network stag hunt but not in our extended game.