The efficacy of cheap talk in collective action problems
| Date | 01 July 2019 |
| DOI | 10.1177/0951629819850625 |
| Author | Brenton Kenkel |
| Published date | 01 July 2019 |
| Subject Matter | Articles |
Article
Journal of Theoretical Politics
2019, Vol.31(3) 370–402
ÓThe Author(s) 2019
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DOI: 10.1177/0951629819850625
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The efficacy of cheap talk in
collective action problems
Brenton Kenkel
Department of PoliticalScience, Vanderbilt University,USA
Abstract
Incomplete information exacerbates the problems inherent in collective action. Participants can-
not efficiently coordinate their actions if they do not know each other’s preferences. I investigate
when ordinary communication, or cheap talk, may resolve mutual uncertainty in collective action
problems. I find that the efficacy of communication depends critically on the relationship between
contributions and the value of the joint project. The incentive barriers to honesty are highest
when every contribution increases the project’s value. Participants then have a strict incentive to
say whatever would induce others to contribute the most, so cheap talk lacks credibility. By con-
trast, when contributions may be marginally worthless, such as when the project has no value
unless contributions hit a certain threshold, communication may help participants avoid wasted
effort. Using these findings, I identify which collective action problems in politics might benefit
from communication and which require more expensive solutions to overcome uncertainty.
Keywords
Cheap talk; collective action; communication; public good provision
1. Introduction
Collective action problems—and how to solve them—are a longstanding concern
in political science and political economy. Because of the incentive to free-ride, vol-
untary contributions to joint projects are likely to be insufficient even in the best of
circumstances (Olson, 1965). But many collective action problems face an addi-
tional hurdle to cooperation that the classical analysis ignores: mutual uncertainty
among potential contributors to the common good. For example, a citizen who
Corresponding author:
Brenton Kenkel,Department of Political Science, Vanderbilt University, 324 Commons, PMB 0505, Nashville,
TN 37203, USA.
Email: brenton.kenkel@vanderbilt.edu
opposes an autocratic government may be unsure of her fellow citizens’ willingness
to risk their lives in a protest. Similarly, countries that have a shared security goal
may not know how much their allies are willing to mobilize to meet that goal.
Uncertainty makes the hard problem of collective action even harder. A poten-
tial contributor cannot calibrate her own actions when she does not fully under-
stand the incentives of other participants. Incomplete information raises two
questions that do not arise in the classic collective action problem. First, is it worth
contributing at all? In a project that requires everyone’s participation to succeed,
one player’s unwillingness to contribute makes everyone else’s contributions worth-
less. With incomplete information, potential participants may refrain for fear that
their partners are insufficiently committed. Second, how should the project’s costs
be divided among participants? When the participants are fully informed, the equi-
librium solution to a standard voluntary collective action problem entails the con-
tributor who values the project most highly taking on a disproportionate share of
the effort (Olson and Zeckhauser, 1966). With incomplete information, however,
players may not know who values the project most and thus may not be able to
coordinate on an optimal division of labor (Palfrey et al., 2017).
In this paper, I examine the simplest possible mechanism by which participants
in collective action could resolve mutual uncertainty without outside
involvement—ordinary communication, which formal theorists usually model as
cheap talk (Crawford and Sobel, 1982; Farrell and Rabin, 1996). When, if at all,
can participants credibly reveal information and thus coordinate their actions
through cheap talk? I investigate this question using a simple but general model of
collective action under incomplete information. I find that the possibility of mean-
ingful communication depends critically on the relationship between individual
contributions and the outcome of collective action. The incentive barriers to honest
communication are strongest in continuous collective action problems—those in
which all contributions have some marginal benefit, though possibly a small one
(e.g. carbon emission reduction). But in threshold problems, in which one partici-
pant’s contribution may be worthless if her partners do not contribute enough (e.g.
building a bridge), at least a limited form of communication is possible in
equilibrium.
A simple logic drives the main findings. In any collective action problem, each
participant at least weakly prefers greater contributions by her partners. In contin-
uous problems, in which every contributionhas positive marginal value, this prefer-
ence is strict—a player is always better off if others give more rather than less. This
strict preference undermines honest communication through cheap talk. In order
for cheap talk to work, a player’s private information (here, her marginal cost of
contributing to the joint project) must affect what she wants the other players to
do; otherwise, all ‘types’ of a player will prefer to say the same thing (Aumann,
1990). Specifically, in a continuous collective action problem, a player would
always want to say whatever would induce her partner to give the most, whether
Kenkel 371
this be by overstating her own costs of contribution (if the players’ efforts are sub-
stitutes) or by understating them (if they are complements).
The incentives are similar, yet different in a critical way, in collective action
problems where a fixed threshold determines whether the project is achieved. Below
the threshold, the marginal benefit of a contribution—one’s own or one’s part-
ner’s—is zero. At the margin, then, a potential contributor may be indifferent
whether her partner gives more or less. More to the point, if a player is sure not to
contribute enough for the threshold to be met (e.g. because she values the project
very little), then she will be indifferent about her partner’s contribution. This indif-
ference turns out to be critical for the possibility of communication. It means a par-
ticipant will be willing to reveal that she will not give enough to meet the threshold,
even though this will encourage others to contribute less than they might have oth-
erwise. By contrast, in a collective action problem where all contributions make at
least a small difference, a participant would be strictly worse off if she said some-
thing that made her partners contribute less.
The analysis speaks to a broad cross-section of political science research, given
the ubiquity of collective action problems with incomplete information in politics.
One area of application is global public goods problems, such as the ongoing refu-
gee crisis and the effort to reverse climate change. These initiatives are complicated
not only by countries’ incentives to free-ride, but also by their uncertainty of where
each other’s breaking points lie. Another application in the international arena is
the provision of collective security, a classic collective action problem (Olson and
Zeckhauser, 1966) that takes place in an environment of high uncertainty (Fearon,
1995; Jervis, 1976). In domestic politics, perhaps the mos t prominent collective
action problem is revolution or other means of overthrowing the government (Tilly,
1978). Potential participants may not know how likely their fellow citizens are to
participate, especially in regimes without free media, making coordination difficult
without some means of sharing information. Some facets of democratic politics,
such as campaign fundraising, also have the features of collective action problems.
The main upshot of my findings is that we should expect uncertainty to impede
cooperation in these areas, above and beyond the difficulties inherent in any collec-
tive action problem, even if the participants can freely communicate with each
other. Uncertainty can only be resolved through mechanisms more ‘expensive’ than
mere talk, such as costly signaling of one’s intent to participate, direct monitoring
by external actors, or binding commitment to a transfer scheme. At best, political
actors may reveal through cheap talk when they are so unwilling to contribute, that
the project is doomed to be worthless. But even this can only take place when there
is a fixed, commonly known threshold for contributions below which the project
has literally no value, a rarity in political collective action problems.
This analysis contributes to the political economy literature on collective action
and public good provision. In a seminal study of the finance of public goods,
372 Journal of Theoretical Politics 31(3)
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