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Communication and Learning

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  • Luca Anderlini
  • Dino Gerardi
  • Roger Lagunoff

Abstract

We study the intergenerational accumulation of knowledge in an infinite-horizon model of communication. Each in a sequence of players receives an informative but imperfect signal of the once-and-for-all realization of an unobserved state. The state affects all players' preferences over present and future decisions. Each player observes his own signal but does not directly observe the realized signals or actions of his predecessors. Instead, he must rely on cheap-talk messages from the previous players to fathom the past. Each player is therefore both a receiver of information with respect to his decision, and a sender with respect to all future decisions. Senders' preferences are misaligned with those of future decision makers. We ask whether there exist "full learning'' equilibria -- ones in which the players' posterior beliefs eventually place full weight on the true state. We show that, regardless of how small the misalignment in preferences is, such equilibria do not exist. This is so both in the case of private communication in which each player only hears the message of his immediate predecessor, and in the case of public communication, in which each player hears the message of all previous players. Surprisingly, in the latter case full learning may be impossible even in the limit as all players become infinitely patient. We also consider the case where all players have access to a mediator who can work across time periods arbitrarily far apart. In this case full learning equilibria exist.

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Bibliographic Info

Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 122247000000001868.

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Date of creation: 08 Feb 2008
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Handle: RePEc:cla:levrem:122247000000001868

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  1. David Kreps & Robert Wilson, 1998. "Sequential Equilibria," Levine's Working Paper Archive 237, David K. Levine.
  2. Mikhail Golosov & Vasiliki Skreta & Aleh Tsyvinski & Andrea Wilson, 2011. "Dynamic Strategic Information Transmission," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 11-17, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Vijay Krishna & John Morgan, 1999. "A Model of Expertise," Working Papers, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics. 154, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
  4. Lagunoff, Roger, 2006. "Credible communication in dynastic government," Journal of Public Economics, Elsevier, Elsevier, vol. 90(1-2), pages 59-86, January.
  5. F. Forges, 2010. "An Approach to Communication Equilibrium," Levine's Working Paper Archive 516, David K. Levine.
  6. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  7. Luca Anderlini & Roger Lagunoff, 2000. "Communication in Dynastic Repeated Games: `Whitewashes' and `Coverups," Working Papers, Georgetown University, Department of Economics gueconwpa~01-01-03, Georgetown University, Department of Economics, revised 01 Jul 2001.
  8. Roger Lagunoff & Akihiko Matsui, 2001. "Organizations and Overlapping Generations Games: Memory, Communication, and Altruism," Working Papers, Georgetown University, Department of Economics 1, Georgetown University, Department of Economics.
  9. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2007. "Social Memory and Evidence from the Past," Working Papers, Georgetown University, Department of Economics gueconwpa~07-07-01, Georgetown University, Department of Economics.
  10. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 10(3), pages 103-118, Summer.
  11. David Spector, 1999. "Rational debate and one-dimensional conflict," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 99-09, Massachusetts Institute of Technology (MIT), Department of Economics.
  12. Banerjee, Abhijit V, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(3), pages 797-817, August.
  13. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195300796, October.
  14. Gale, Douglas, 1996. "What have we learned from social learning?," European Economic Review, Elsevier, Elsevier, vol. 40(3-5), pages 617-628, April.
  15. Giuseppe Moscarin & Marco Ottaviani & Lones Smith, . "Social Learning in a Changing World," ELSE working papers, ESRC Centre on Economics Learning and Social Evolution 010, ESRC Centre on Economics Learning and Social Evolution.
  16. Ottaviani, Marco & Sorensen, Peter Norman, 2006. "Professional advice," Journal of Economic Theory, Elsevier, Elsevier, vol. 126(1), pages 120-142, January.
  17. Hajime Kobayashi, 2007. "Folk Theorems For Infinitely Repeated Games Played By Organizations With Short-Lived Members," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 517-549, 05.
  18. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
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Citations

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Cited by:
  1. Roger Lagunoff, 2002. "Credible Communication in Dynastic Government," Game Theory and Information, EconWPA 0203003, EconWPA.
  2. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2006. "A 'Super' Folk Theorem for Dynastic Repeated Games," Levine's Bibliography 784828000000000664, UCLA Department of Economics.
  3. Büchel, Berno & Hellmann, Tim & Klößner, Stefan, 2013. "Opinion Dynamics and Wisdom under Conformity," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79770, Verein für Socialpolitik / German Economic Association.
  4. Mikhail Golosov & Vasiliki Skreta & Aleh Tsyvinski & Andrea Wilson, 2013. "Dynamic Strategic Information Transmission," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 13-03, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. Petri Ruuskanen & Tomi Kankainen, 2011. "Dynamic capabilities in small and medium manufacturing firms in rural Finland – role of social capital?," ERSA conference papers ersa11p806, European Regional Science Association.

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