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Information-Revelation and Coordination Using Cheap Talk in a Battle of the Sexes with Two-Sided Private Information

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  • Chirantan Ganguly
  • Indrajit Ray

Abstract

We consider a Battle of the Sexes game with two types, High and Low, for each player and allow cheap talk regarding players' types before the game. We prove that the unique fully revealing symmetric cheap talk equilibrium exists for a low range of prior probability of the High-Type. This equilibrium has a desirable type-coordination property: it fully coordinates on the ex-post efficient pure Nash equilbrium when the players' types are different. Type-coordination is also obtained in a partially revealing equilibrium in which only the High-type is not truthful, for a medium range of prior probability of the High-type.

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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/13-01R.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 13-01r.

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Length: 24 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:bir:birmec:13-01r

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Keywords: Battle of the Sexes; Private Information; Cheap Talk; Coordination; Full Revelation;

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  1. 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.
  2. Maria Goltsman & Gregory Pavlov, 2012. "Communication in Cournot Oligopoly," UWO Department of Economics Working Papers 20121, University of Western Ontario, Department of Economics.
  3. Costa-Gomes, Miguel A., 2002. "A Suggested Interpretation of Some Experimental Results on Preplay Communication," Journal of Economic Theory, Elsevier, vol. 104(1), pages 104-136, May.
  4. Russell Cooper & Douglas V. DeJong & Robert Forsythe & Thomas W. Ross, 1989. "Communication in the Battle of the Sexes Game: Some Experimental Results," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 568-587, Winter.
  5. In-Uck Park, 2002. "Cheap-Talk Coordination of Entry by Privately Informed Firms," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 377-393, Autumn.
  6. Sandeep Baliga & Tomas Sjostrom, 2001. "Arms Races and Negotiations," Levine's Working Paper Archive 391749000000000005, David K. Levine.
  7. Banks, Jeffrey S. & Calvert, Randall L., 1992. "A battle-of-the-sexes game with incomplete information," Games and Economic Behavior, Elsevier, vol. 4(3), pages 347-372, July.
  8. Steven A. Matthews & Andrew Postlewaite, 1987. "Pre-Play Communication in Two-Person Sealed-Bid Double Auctions," Discussion Papers 744R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Farrell, Joseph & Gibbons, Robert, 1989. "Cheap talk can matter in bargaining," Journal of Economic Theory, Elsevier, vol. 48(1), pages 221-237, June.
  10. Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
  11. Baliga, Sandeep & Morris, Stephen, 2002. "Co-ordination, Spillovers, and Cheap Talk," Journal of Economic Theory, Elsevier, vol. 105(2), pages 450-468, August.
  12. Robert J. Aumann & Sergiu Hart, 2003. "Long Cheap Talk," Econometrica, Econometric Society, vol. 71(6), pages 1619-1660, November.
  13. Sandeep Baliga & Tomas Sj�str�m, 2004. "Arms Races and Negotiations," Review of Economic Studies, Oxford University Press, vol. 71(2), pages 351-369.
  14. Crawford, Vincent, 1998. "A Survey of Experiments on Communication via Cheap Talk," Journal of Economic Theory, Elsevier, vol. 78(2), pages 286-298, February.
  15. Doraszelski Ulrich & Gerardi Dino & Squintani Francesco, 2003. "Communication and Voting with Double-Sided Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-41, August.
  16. Antonio Cabrales & Walter Garcia Fontes & Massimo Motta, 1997. "Risk dominance selects the leader. An experimental analysis," Economics Working Papers 222, Department of Economics and Business, Universitat Pompeu Fabra.
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