In this paper we experimentally test strategic information transmission between one informed and two uninformed agents in a cheap-talk game. We find evidence of the "disciplining" effect of public communication as compared to private; however, it is much weaker than predicted by the theory. Adding a second receiver naturally increases the complexity of strategic thinking when communication is public. Using the level-k model, we exploit the within subject design to show how individuals decrease their level-k in public communication. Surprisingly, we find that individuals become more sophisticated when they communicate privately with two receivers rather than one.
Drugov, M., Hérnan-Gonzalez, H., Kujal, P., & Martinez, M.T. (2013). Cheap talk with two audiences: An experiment. ESI Working Paper 13-32. Retrieved from http://digitalcommons.chapman.edu/esi_working_papers/28