Strategic Information Transmission with Budget Constraint
AbstractIn this paper, I discuss a Cheap Talk model that arises during the allocation of a limited budget to multiple Senders by a Receiver with private communication. The Receiver's utility is the sum of the utilities of the Senders. Considering quadratic utility functions, I show that there is no fully revealing equilibrium with budget constraint. I also show that a higher budget facilitates information transmission to the Receiver in terms of ex-ante expected utility by considering (1) an equilibrium where only one Sender reveals truthfully, (2) a symmetric equilibrium with two intervals and (3) a commitment strategy by the Receiver where only one Sender receives his desired amount. The commitment strategy is doing better than the other two types of equilibria for budget more than a particular value. This requires us to look for equilibria with higher number of intervals which does better than the commitment strategy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2012_19.
Date of creation: 2012
Date of revision:
Contact details of provider:
Postal: Cannaregio, S. Giobbe no 873 , 30121 Venezia
Web page: http://www.unive.it/dip.economia
More information through EDIRC
Cheap Talk; Multiple Senders; Budget Constraint;
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; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-CTA-2012-10-13 (Contract Theory & Applications)
- NEP-GTH-2012-10-13 (Game Theory)
- NEP-HPE-2012-10-13 (History & Philosophy of Economics)
- NEP-MIC-2012-10-13 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McGee, Andrew & Yang, Huanxing, 2013. "Cheap talk with two senders and complementary information," Games and Economic Behavior, Elsevier, vol. 79(C), pages 181-191.
- Ming Li, 2003. "To Disclose or Not to Disclose: Cheap Talk with Uncertain Biases," Working Papers 04003, Concordia University, Department of Economics, revised Aug 2004.
- Ronny Razin & Gilat Levy, 2004.
"Multidimentional Cheap Talk,"
2004 Meeting Papers
184, Society for Economic Dynamics.
- Takahashi, Satoru & Ambrus, Attila, 2008.
"Multi-Sender Cheap Talk with Restricted State Spaces,"
3200263, Harvard University Department of Economics.
- Ambrus, Attila & Takahashi, Satoru, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
- repec:fth:stanho:e-89-7 is not listed on IDEAS
- Vijay Krishna & John Morgan, 1999.
"A Model of Expertise,"
154, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
- Marco Battaglini, 2002.
"Multiple Referrals and Multidimensional Cheap Talk,"
Econometric Society, vol. 70(4), pages 1379-1401, July.
- Marco Battaglini, 1999. "Multiple Referrals and Multidimensional Cheap Talk," Discussion Papers 1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers 1557, Econometric Society.
- Farrell, J. & Gibbons, R., 1989.
"Cheap Talk With Two Audiences,"
518, Massachusetts Institute of Technology (MIT), Department of Economics.
- Lars Frisell & Johan N. M. Lagerlöf, 2007. "A Model of Reputation in Cheap Talk," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(1), pages 49-70, 03.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geraldine Ludbrook).
If references are entirely missing, you can add them using this form.