An Experimental Study of Credible Deviations and ACDC
Tinbergen Institute Discussion Paper No. 11-153/1
68 Pages Posted: 5 Nov 2011 Last revised: 27 Nov 2012
Date Written: September 12, 2012
We test the Average Credible Deviation Criterion (ACDC), a stability measure and refinement for cheap talk equilibria introduced in De Groot Ruiz, Offerman & Onderstal (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.
Keywords: cheap talk, refinement, selection, experiment, neologism proofness, announcement proofness, ACDC
JEL Classification: C72, C92, D82, D83
Suggested Citation: Suggested Citation