Comparative cheap talk
AbstractWhen are comparative statements credible? For instance, when can a professor rank different students for an employer, or a stock analyst rank different stocks for a client? We show that simple complementarity conditions ensure that an expert with private information about multiple issues can credibly rank the issues for a decision maker. By restricting the expertâs ability to exaggerate, multidimensional cheap talk of this form permits communication when it would not be credible in a single dimension. The communication gains can be substantial with even a couple of issues, and the complete ranking is asymptotically equivalent to full revelation as the number of issues becomes large. Nevertheless, partial rankings are sometimes more credible and/or more profitable for the expert than the complete ranking. We confirm the robustness of comparative cheap talk to asymmetries that are not too large. Moreover, we show that for a sufficiently large number of independent issues there are always some issues sufficiently symmetric to permit influential cheap talk.
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 Journal of Economic Theory.
Volume (Year): 132 (2007)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- L0 - Industrial Organization - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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.:
- Sandeep Baliga & Stephen Morris, 2000.
"Coordination, Spillovers, and Cheap Talk,"
1301, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- V. Crawford & J. Sobel, 2010.
"Strategic Information Transmission,"
Levine's Working Paper Archive
544, David K. Levine.
- Susan Athey, 2002. "Monotone Comparative Statics Under Uncertainty," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 187-223, February.
- Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2000.
"Best Foot Forward or Best for Last in a Sequential Auction?,"
Claremont Colleges Working Papers
2000-43, Claremont Colleges.
- Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2006. "Best foot forward or best for last in a sequential auction?," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 176-194, 03.
- Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2004. "Best Foot Forward or Best for Last in a Sequential Auction?," Working Papers 2004-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Marco Battaglini, 2002.
"Multiple Referrals and Multidimensional Cheap Talk,"
Econometric Society, vol. 70(4), pages 1379-1401, July.
- Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers 1557, Econometric Society.
- Marco Battaglini, 1999. "Multiple Referrals and Multidimensional Cheap Talk," Discussion Papers 1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Archishman Chakraborty & Nandini Gupta & Rick Harbaugh, 2002. "Seller Cheap Talk in Common Value Auctions," Claremont Colleges Working Papers 2002-30, Claremont Colleges.
- Sobel, Joel, 1985. "A Theory of Credibility," Review of Economic Studies, Wiley Blackwell, vol. 52(4), pages 557-73, October.
- Krishna, Vijay & Morgan, John, 2004. "The art of conversation: eliciting information from experts through multi-stage communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 147-179, August.
- Levy, Gilat & Razin, Ronny, 2004.
"Multidimensional Cheap Talk,"
CEPR Discussion Papers
4393, C.E.P.R. Discussion Papers.
- Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
- Robert J. Aumann & Sergiu Hart, 2002.
"Long Cheap Talk,"
Discussion Paper Series
dp284, The Center for the Study of Rationality, Hebrew University, Jerusalem, revised Nov 2002.
- Marco Ottaviani & Francesco Squintani, 2002. "Non-Fully Strategic Information Transmission," Wallis Working Papers WP29, University of Rochester - Wallis Institute of Political Economy.
- Athey, Susan, 2002. "Monotone Comparative Statics Under Uncertainty," Scholarly Articles 3372263, Harvard University Department of Economics.
- Wouter Dessein, 2002.
"Authority and Communication in Organizations,"
Review of Economic Studies,
Oxford University Press, vol. 69(4), pages 811-838.
- Wouter Dessein, 2000. "Authority and Communication in Organizations," Econometric Society World Congress 2000 Contributed Papers 1747, Econometric Society.
- Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
- Morgan, J. & Stocken, P., 1998.
"An Analysis of Stock Recommendations,"
204, Princeton, Woodrow Wilson School - Public and International Affairs.
- Michael Ostrovsky & Michael Schwarz, 2003. "Equilibrium Information Disclosure: Grade Inflation and Unraveling," Harvard Institute of Economic Research Working Papers 1996, Harvard - Institute of Economic Research.
- Stephen Morris, 2001.
Journal of Political Economy,
University of Chicago Press, vol. 109(2), pages 231-265, April.
- David Spector, 1999.
"Rational debate and one-dimensional conflict,"
99-09, Massachusetts Institute of Technology (MIT), Department of Economics.
- Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, 01.
- Phillip C. Stocken, 2000. "Credibility of Voluntary Disclosure," RAND Journal of Economics, The RAND Corporation, vol. 31(2), pages 359-374, Summer.
- Chakraborty, Archishman & Harbaugh, Rick, 2003. "Cheap talk comparisons in multi-issue bargaining," Economics Letters, Elsevier, vol. 78(3), pages 357-363, March.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
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.