Working Paper: NBER ID: w26045
Authors: Fo Kodjo Dzinyefa Aflagah; Tanguy Bernard; Angelino Viceisza
Abstract: Coordination is central to social interactions. Theory and conventional lab experiments suggest that cheap talk/communication can enhance coordination under certain conditions. Two aspects that remain underexplored are (1) the interaction between the number of players (group size) and communication and (2) how existing findings might play out in the field. We address both of these by studying a typical naturally-occurring setting that requires coordination; that is, one where members of agricultural cooperatives seek to jointly sell their output. Combining artefactual/lab-in-the-field experiments (LFEs), natural field experiments (RCTs), surveys, and cooperative records, we find that (1) revealing farmers' intended sales (i.e., cheap talk/communication) yields enhanced collective commercialization (i.e., coordination), particularly in larger groups; (2) such cheap talk may lead to higher incomes for small-scale farmers; (3) participants transfer learning from the LFEs thus affecting subsequent behavior in the RCTs (i.e., the day-to-day environment). Our results contribute to existing literature by highlighting the potential for cheap-talk institutions to (1) boost coordination, particularly in settings with greater strategic uncertainty (e.g., larger farmer cooperatives), and (2) promote collective entrepreneurship and development.
Keywords: Coordination; Cheap Talk; Collective Commercialization; Agricultural Cooperatives; Senegal
JEL Codes: C92; C93; D7; L26; O12; P32; Q13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cheap talk communication (D83) | reduced strategic uncertainty (D80) |
| reduced strategic uncertainty (D80) | collective commercialization (D26) |
| cheap talk communication (D83) | higher incomes for small-scale farmers (Q12) |
| cheap talk communication (D83) | collective commercialization (D26) |
| group size (C92) | likelihood of collective commercialization (D26) |
| LFEs (Y60) | behavior in field context (C92) |