Charness and Dufwenberg (American Economic Review, June 2011, 1211-1237) have recently demonstrated that cheap-talk communication raises efficiency in bilateral contracting situations with adverse selection. We replicate their finding and check its robustness by introducing competition between...

Charness and Dufwenberg (American Economic Review, June 2011, 1211-1237) have recently demonstrated that cheap-talk communication raises efficiency in bilateral contracting situations with adverse selection. We replicate their finding and check its robustness by introducing competition between...

The use of monetary incentives may not affect behavior much in some contexts, or it may simply reduce the dispersion of data around some theoretical prediction. But the experiments indicate that incentive effects may be large and systematic in other contexts. In the absence of a widely accepted...