# 11-037/1 (2011-02-14; 2011-10-31)

Adrian de Groot Ruiz, University of Amsterdam; Theo Offerman, University of Amsterdam; Sander Onderstal, University of Amsterdam
cheap talk, neologism proofness, announcement proofness, credible deviation, ACDC, experiment
JEL codes:
C72, C92, D82, D83

This discussion paper resulted in a publication in 'Games and Economic Behavior', 2015, 91, 14-25.

Currently no refinement exists that successfully selects equilibria across a wider range of Cheap Talk games. We propose a generalization of refinements based on credible deviations, such as neologism proofness and announcement proofness. According to our Average Credible Deviation Criterion (ACDC), the stability of an equilibrium is determined by the frequency and the size of credible deviations. In our experiment, we find support for the relevance of credible deviations. In addition, we find support for ACDC in settings where other criteria remain silent. ACDC also explains results from previous experiments.