Why Would You Say that? The Effect of Adviser's Self-Interest on Credibility of Advice in Coordination Games
35 Pages Posted: 20 Aug 2003
Date Written: July 14, 2003
Abstract
Experimental research on the credibility of advice in coordination games shows that advice can have considerable influence on players' behavior, even when this advice conflicts with payoff-dominance. A crucial feature of this prior research, however, is that the adviser has no share in the final outcomes of the game. In most situations outside the laboratory where an adviser makes a recommendation, the adviser has interest in obtaining certain outcomes. At the very least, the players' perceptions of why the adviser is making the recommendation might be important in determining their behavior.
In this study, we investigate the credibility of non-binding advice in Pareto-ranked coordination games where the adviser does not make any strategy choice, but either does or does not have a stake in the final payoff of the game. In one version of our game, the adviser can receive a positive payoff only if the players forgo the payoff-dominant outcome. We find that the credibility of advice is affected by the adviser's motive. If the advice appears to be "self-interested" (i.e., attempting to implement an outcome that yields the highest payoff for the adviser), it is less credible than if the same advice is given by a neutral independent party who has no economic interest in the game.
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