The result of world powers in WTO: A cheap-talk game under different communication protocols
AbstractOfficial reports and case studies reveal that China experienced different means of communication with the world powers since it joined the World Trade Organization in 2001. In the first five years, China had public communication with both the United States and the European Union under the Transitional Review Mechanism. In 2006 a new means of communication, the China–US Strategic and Economic Dialogue, started to take effect. Reports show that the new mechanism has advanced the China–US relationship positively and productively. The difference between the two means of communication stimulates our study. We adopt a game theory model to examine the impact of different communication protocols on China's incentives to reveal information. We analyze a cheap-talk game between an informed agent and two uninformed principals who coordinate actions under two communication protocols: public and private communication. First, all equilibria under both means of communication are characterized. Information precision of the agent's equilibrium messages decreases with the principals' preference biases. Second, under private communication the agent communicates more informatively with one principal if she in effect reveals little information to the other. Under private communication there exists an informative equilibrium with asymmetric levels of information precision even when all equilibria under public communication are uninformative.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 27 (2013)
Issue (Month): C ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/chieco
Strategic information transmission; Tacit coordination; Public communication; Private communication; WTO;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stephen Morris & Hyun Song Shin, 2007.
Journal of the European Economic Association,
MIT Press, vol. 5(2-3), pages 594-602, 04-05.
- Ricardo Alonso & Wouter Dessein & Niko Matouschek, 2008.
"When Does Coordination Require Centralization?,"
American Economic Review,
American Economic Association, vol. 98(1), pages 145-79, March.
- Goltsman, Maria & Pavlov, Gregory, 2011.
"How to talk to multiple audiences,"
Games and Economic Behavior,
Elsevier, vol. 72(1), pages 100-122, May.
- Farrell, Joseph & Gibbons, Robert, 1989.
"Cheap Talk with Two Audiences,"
American Economic Review,
American Economic Association, vol. 79(5), pages 1214-23, December.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- repec:fth:stanho:e-89-7 is not listed on IDEAS
- Frédéric Koessler & David Martimort, 2008. "Multidimensional communication mechanisms: cooperative and conflicting designs," PSE Working Papers halshs-00586854, HAL.
- Andrea Galeotti & Christian Ghiglino & Francesco Squintani, 2009. "Strategic Information Transmission in Networks," Economics Discussion Papers 668, University of Essex, Department of Economics.
- Jeanne Hagenbach & Frédéric Koessler, 2008.
"Strategic communication networks,"
PSE Working Papers
- Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic communication networks," Documents de travail du Centre d'Economie de la Sorbonne 09005, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic Communication Networks," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00367692, HAL.
- Frederic Koessler, 2006.
"Lobbying with Two Audiences: Public vs Private Certification,"
THEMA Working Papers
2006-12, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Koessler, Frédéric, 2008. "Lobbying with two audiences: Public vs private certification," Mathematical Social Sciences, Elsevier, vol. 55(3), pages 305-314, May.
- Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
- Ricardo Alonso & Wouter Dessein & Niko Matouschek, 2008. "When Does Coordination Require Centralization? Corrigendum," American Economic Review, American Economic Association, vol. 98(3), pages 1195-96, June.
- Johns, Leslie, 2007. "A Servant of Two Masters: Communication and the Selection of International Bureaucrats," International Organization, Cambridge University Press, vol. 61(02), pages 245-275, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.