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Disagreement and evidence production in strategic information transmission

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  • Péter Eső

    ()

  • Ádám Galambos

    ()

Abstract

We expand Crawford and Sobel’s (Econometrica 50(6):1431–1451, 1982 ) model of information transmission to allow for the costly provision of ‘hard evidence’ in addition to conventional cheap talk. Under mild assumptions we prove that equilibria have an interval-partition structure, where types of the Sender belonging to the same interval either all induce the same action through cheap talk or reveal their types through hard evidence. We also show that the availability of costly hard signals may reverse one of the important implications of the classical cheap talk model, namely, that diverging preferences always lead to less communication. Copyright Springer-Verlag 2013

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File URL: http://hdl.handle.net/10.1007/s00182-012-0344-8
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Bibliographic Info

Article provided by Springer in its journal International Journal of Game Theory.

Volume (Year): 42 (2013)
Issue (Month): 1 (February)
Pages: 263-282

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Handle: RePEc:spr:jogath:v:42:y:2013:i:1:p:263-282

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Web page: http://link.springer.de/link/service/journals/00182/index.htm

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Related research

Keywords: Cheap talk; Hard evidence; Information transmission;

References

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  1. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  2. Navin Kartik, 2009. "Strategic Communication with Lying Costs," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1359-1395.
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  12. Chakraborty, Archishman & Harbaugh, Rick, 2007. "Comparative cheap talk," Journal of Economic Theory, Elsevier, vol. 132(1), pages 70-94, January.
    • Archishman Chakraborty & Rick Harbaugh, 2004. "Comparative Cheap Talk," Working Papers 2004-08, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  13. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
  14. Lipman Barton L. & Seppi Duane J., 1995. "Robust Inference in Communication Games with Partial Provability," Journal of Economic Theory, Elsevier, vol. 66(2), pages 370-405, August.
  15. Rubinstein, Ariel & Glazer, Jacob, 2006. "A study in the pragmatics of persuasion: a game theoretical approach," Theoretical Economics, Econometric Society, vol. 1(4), pages 395-410, December.
  16. Deneckere, Raymond & Severinov, Sergei, 2008. "Mechanism design with partial state verifiability," Games and Economic Behavior, Elsevier, vol. 64(2), pages 487-513, November.
  17. Verrecchia, Robert E., 1983. "Discretionary disclosure," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 179-194, April.
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