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Communication and Early Contributions
Author(s) -
BARBIERI STEFANO
Publication year - 2012
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2012.01551.x
Subject(s) - negotiation , context (archaeology) , outcome (game theory) , welfare , joint (building) , economics , public relations , microeconomics , business , political science , law , engineering , market economy , architectural engineering , paleontology , biology
In the context of the voluntary provision of a public good, I study the interaction of communication and dynamics in contributions. I modify the cheap talk, joint‐project framework of Agastya, Menezes, and Sengupta (2007) by considering early contributions that precede communication and by assuming partially funded projects are not completely worthless. First, I show environments in which, without early contributions, parties cannot be trusted to communicate sincerely, so that the joint endeavor always fails. Then, for the same environments, I demonstrate that early contributions can create the conditions for mutual trust, improve the outcome of subsequent communication, and eventually increase welfare. This trust‐building role of early contributions matches well with the aims that negotiation scholars attribute to preconditions for negotiations and to preliminary concessions.