To Win or Not to Lose: an Experiment on Communication Efforts

In contrast to the cheap talk literature, our laboratory experiment studies the impact of monetary incentives on real, costly and truthful communication effort choices. It investigates and confirms some predictions of the Dewatripont and Tirole's (2005) modes of communication model.The experiment also gives evidence that, in a situation where a sender tries to convince a receiver to accept a project, the receiver pursues one out of two communication goals.On the one hand, if without any communication the receiver would refuse the project, his communication objective is to identify and accept a high quality project. His effort depends positively on the earning he wins when accepting a high quality project. On the other hand, if without any communication the receiver would accept the project, his communication objective is to identify and refuse a low quality project. His effort depends positively on his loss when accepting a low quality project.