Multi-sender cheap talk with restricted state spaces

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Multi-sender cheap talk with restricted state spaces

Author Info

Ambrus, Attila () (Harvard University)
Takahashi, Satoru () (Princeton University)

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Satoru Takahashi

Abstract

This paper analyzes multi-sender cheap talk when the state space might be restricted, either because the policy space is restricted, or the set of rationalizable policies of the receiver is not the whole space. We provide a necessary and sufficient condition for the existence of a fully revealing perfect Bayesian equilibrium for any state space. We show that if biases are large enough and are not of similar directions, where the notion of similarity depends on the shape of the state space, then there is no fully revealing perfect Bayesian equilibrium. The results suggest that boundedness, as opposed to dimensionality, of the state space plays an important role in determining the qualitative implications of a cheap talk model. We also investigate equilibria that satisfy a robustness property, diagonal continuity.

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Publisher Info
Article provided by Society for Economic Theory in its journal Theoretical Economics.

Volume (Year): 3 (2008)
Issue (Month): 1 (March)
Pages: 1-27
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Handle: RePEc:the:publsh:334

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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
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

Cited by:
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Tymofiy Mylovanov & Andriy Zapechelnyuk, 2008. "Contracts for Experts with Opposing Interests," Discussion Papers 5, Kyiv School of Economics, revised Sep 2009. [Downloadable!]
Archishman Chakraborty & Rick Harbaugh, 2006. "Persuasion by Cheap Talk," Working Papers 2006-10, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy, revised Oct 2009. [Downloadable!]
Peter Eso & James Schummer, 2005. "Robust Deviations from Signaling Equilibria," Discussion Papers 1406, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]

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