Reverberation effect of communication in a public goods game

Abstract

Using a public goods laboratory experiment, this paper analyzes the extent to which face-to-face communication keeps its efficiency gains even after its removal. This is important as communication in real world is costly (e.g. time). If the effect of communication is long-lasting, the number of communication periods could be minimized. This paper provides evidence that there is a lasting positive effect on contributions even after communication was removed. Yet, after the removal, the contributions are lower and abate over time to the previous magnitude. This is referred to as the reverberation effect of communication. As we do not observe an effect of endogenizing communication, the strongest driver of the size of the contributions is the existence of communication or its reverberation. Eventually, the experiment provides evidence for a strong end-game effect after communication was removed, insinuating communication does not protect from the end-game behavior. In total, the results of the paper imply, that the effects of communication are not permanent but communication should be repeated. Simultaneously, results indicate no need for permanent communication. Since communication is conducted using video-conference tools, we present results from a machine learning based analysis of facial expressions to predict contribution behavior on group level.