IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-01289379.html
   My bibliography  Save this paper

The Value of Mediated Communication

Author

Listed:
  • Andrés Salamanca

    (SDU - University of Southern Denmark)

Abstract

This paper characterizes optimal communication equilibria (which models mediation) in sender-receiver games. We assume that communication devices are designed to maximize the ex-ante welfare of the informed party (i.e., the sender). Communication equilibria are defined by a set of linear incentive constraints. The associated dual variables of these constraints yield shadow prices that are used to get "virtual utility functions" that intuitively characterize the signaling costs of incentive compatibility. A key result is a characterization of the value of an optimal communication equilibrium (value of mediation) from the concavification of the sender's indirect virtual utility function over prior beliefs. Using this result we provide necessary and sufficient conditions for a communication equilibrium to be optimal. An additional result establishes a bound on the number of messages that the sender needs to convey in order to achieve the value of mediation.

Suggested Citation

  • Andrés Salamanca, 2016. "The Value of Mediated Communication," Working Papers hal-01289379, HAL.
    • Handle: RePEc:hal:wpaper:hal-01289379
    Note: View the original document on HAL open archive server: https://hal.science/hal-01289379v5
    as

    Download full text from publisher

    File URL: https://hal.science/hal-01289379v5/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laura Doval & Vasiliki Skreta, 2022. "Mechanism Design With Limited Commitment," Econometrica, Econometric Society, vol. 90(4), pages 1463-1500, July.
    2. Smolin, Alex & Doval, Laura, 2021. "Information Payoffs: An Interim Perspective," TSE Working Papers 21-1247, Toulouse School of Economics (TSE).
    3. Laura Doval & Alex Smolin, 2021. "Persuasion and Welfare," Papers 2109.03061, arXiv.org, revised Sep 2023.

    More about this item

    Keywords

    Mediated communication; Incentive compatibility; Virtual utility; Concavification;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-01289379. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.