The result of world powers in WTO: A cheap-talk game under different communication protocols
Official reports and case studies reveal that China experienced different means of communication with the world powers since it joined the World Trade Organization in 2001. In the first five years, China had public communication with both the United States and the European Union under the Transitional Review Mechanism. In 2006 a new means of communication, the China–US Strategic and Economic Dialogue, started to take effect. Reports show that the new mechanism has advanced the China–US relationship positively and productively. The difference between the two means of communication stimulates our study. We adopt a game theory model to examine the impact of different communication protocols on China's incentives to reveal information. We analyze a cheap-talk game between an informed agent and two uninformed principals who coordinate actions under two communication protocols: public and private communication. First, all equilibria under both means of communication are characterized. Information precision of the agent's equilibrium messages decreases with the principals' preference biases. Second, under private communication the agent communicates more informatively with one principal if she in effect reveals little information to the other. Under private communication there exists an informative equilibrium with asymmetric levels of information precision even when all equilibria under public communication are uninformative.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Stephen Morris & Hyun Song Shin, 2007.
Journal of the European Economic Association,
MIT Press, vol. 5(2-3), pages 594-602, 04-05.
- Jeanne Hagenbach & Frédéric Koessler, 2010.
"Strategic Communication Networks,"
Review of Economic Studies,
Oxford University Press, vol. 77(3), pages 1072-1099.
- Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic communication networks," Documents de travail du Centre d'Economie de la Sorbonne 09005, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Frederic Koessler, 2006.
"Lobbying with Two Audiences: Public vs Private Certification,"
THEMA Working Papers
2006-12, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Koessler, Frédéric, 2008. "Lobbying with two audiences: Public vs private certification," Mathematical Social Sciences, Elsevier, vol. 55(3), pages 305-314, May.
- Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
- Oliver Board, 2006. "Expert Advice with Multiple Decision Makers," Working Papers 242, University of Pittsburgh, Department of Economics, revised Jan 2006.
- Andrea Galeotti & Christian Ghiglino & Francesco Squintani, 2009. "Strategic Information Transmission in Networks," Economics Discussion Papers 668, University of Essex, Department of Economics.
- Johns, Leslie, 2007. "A Servant of Two Masters: Communication and the Selection of International Bureaucrats," International Organization, Cambridge University Press, vol. 61(02), pages 245-275, April.
- Alonso, Ricardo & Dessein, Wouter & Matouschek, Niko, 2006.
"When Does Coordination Require Centralization?,"
CEPR Discussion Papers
5802, C.E.P.R. Discussion Papers.
- Farrell, Joseph & Gibbons, Robert, 1989.
"Cheap Talk with Two Audiences,"
American Economic Review,
American Economic Association, vol. 79(5), pages 1214-23, December.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Maria Goltsman & Gregory Pavlov, 2008.
"How to Talk to Multiple Audiences,"
UWO Department of Economics Working Papers
20081, University of Western Ontario, Department of Economics.
- Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic Communication Networks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367692, HAL.
- Frédéric Koessler & David Martimort, 2008. "Multidimensional communication mechanisms: cooperative and conflicting designs," PSE Working Papers halshs-00586854, HAL.
- Ricardo Alonso & Wouter Dessein & Niko Matouschek, 2008. "When Does Coordination Require Centralization? Corrigendum," American Economic Review, American Economic Association, vol. 98(3), pages 1195-96, June.
When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:27:y:2013:i:c:p:192-207. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.