IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v109y2018icp132-155.html
   My bibliography  Save this article

Failure of common knowledge of language in common-interest communication games

Author

Listed:
  • Blume, Andreas

Abstract

This paper explores higher-order uncertainty about message availability in communication games with perfectly aligned preferences. It can be impossible to achieve ex post efficiency in equilibrium even when it is mutual knowledge that the size of the set of available messages would be sufficient to convey all payoff-relevant information. There are equilibria that achieve ex post efficiency whenever a rich language condition is satisfied: the set of available messages is large relative to the sender's assessment of the number of information sets of the sender the receiver considers possible. Weaker conditions suffice if one adopts an ex ante perspective.

Suggested Citation

  • Blume, Andreas, 2018. "Failure of common knowledge of language in common-interest communication games," Games and Economic Behavior, Elsevier, vol. 109(C), pages 132-155.
    • Handle: RePEc:eee:gamebe:v:109:y:2018:i:c:p:132-155
    DOI: 10.1016/j.geb.2017.12.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0899825617302440
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.geb.2017.12.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephen Morris, 2001. "Political Correctness," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 231-265, April.
    2. Jacques Crémer & Luis Garicano & Andrea Prat, 2007. "Language and the Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(1), pages 373-407.
    3. Li, Ming & Madarász, Kristóf, 2008. "When mandatory disclosure hurts: Expert advice and conflicting interests," Journal of Economic Theory, Elsevier, vol. 139(1), pages 47-74, March.
    4. Ong, L. M. L. & de Haes, J. C. J. M. & Hoos, A. M. & Lammes, F. B., 1995. "Doctor-patient communication: A review of the literature," Social Science & Medicine, Elsevier, vol. 40(7), pages 903-918, April.
    5. Jonathan Weinstein & Muhamet Yildiz, 2007. "A Structure Theorem for Rationalizability with Application to Robust Predictions of Refinements," Econometrica, Econometric Society, vol. 75(2), pages 365-400, March.
    6. Rubinstein, Ariel, 1989. "The Electronic Mail Game: Strategic Behavior under "Almost Common Knowledge."," American Economic Review, American Economic Association, vol. 79(3), pages 385-391, June.
    7. Crawford, Vincent P & Haller, Hans, 1990. "Learning How to Cooperate: Optimal Play in Repeated Coordination Games," Econometrica, Econometric Society, vol. 58(3), pages 571-595, May.
    8. Shin, Hyun Song & Williamson, Timothy, 1996. "How Much Common Belief Is Necessary for a Convention?," Games and Economic Behavior, Elsevier, vol. 13(2), pages 252-268, April.
    9. Atsushi Kajii & Stephen Morris, 1997. "The Robustness of Equilibria to Incomplete Information," Econometrica, Econometric Society, vol. 65(6), pages 1283-1310, November.
    10. Morgan, John & Stocken, Phillip C, 2003. "An Analysis of Stock Recommendations," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 183-203, Spring.
    11. Jäger, Gerhard & Koch-Metzger, Lars & Riedel, Frank, 2011. "Voronoi languages. Equilibria in cheap-talk games with high-dimensional types and few signals," Center for Mathematical Economics Working Papers 420, Center for Mathematical Economics, Bielefeld University.
    12. Monderer, Dov & Samet, Dov, 1989. "Approximating common knowledge with common beliefs," Games and Economic Behavior, Elsevier, vol. 1(2), pages 170-190, June.
    13. Steve Alpern, 2002. "Rendezvous Search: A Personal Perspective," Operations Research, INFORMS, vol. 50(5), pages 772-795, October.
    14. Locke, John, 1690. "An Essay Concerning Human Understanding," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number locke1690.
    15. McLennan, Andrew, 1998. "Consequences of the Condorcet Jury Theorem for Beneficial Information Aggregation by Rational Agents," American Political Science Review, Cambridge University Press, vol. 92(2), pages 413-418, June.
    16. Locke, John, 1697. "An Answer to Remarks Upon an Essay Concerning Human Understanding etc," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number locke1697.
    17. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Hagenbach, Jeanne & Koessler, Frédéric, 2020. "Cheap talk with coarse understanding," Games and Economic Behavior, Elsevier, vol. 124(C), pages 105-121.
    2. Suzuki, Toru, 2023. "Endogenous ambiguity and rational miscommunication," Journal of Economic Theory, Elsevier, vol. 211(C).
    3. Jeanne Hagenbach & Frédéric Koessler, 2019. "Partial Language Competence," Working Papers hal-03393108, HAL.
    4. repec:hal:spmain:info:hdl:2441/3b2230a4419v9ojcpu27tsdrtb is not listed on IDEAS
    5. repec:hal:wpspec:info:hdl:2441/3b2230a4419v9ojcpu27tsdrtb is not listed on IDEAS
    6. Giovannoni, Francesco & Xiong, Siyang, 2019. "Communication under language barriers," Journal of Economic Theory, Elsevier, vol. 180(C), pages 274-303.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miura, Shintaro & Yamashita, Takuro, 2018. "Divergent Interpretation and Divergent Prediction in Communication," TSE Working Papers 18-939, Toulouse School of Economics (TSE).
    2. Andreas Blume & April Mitchell Franco & Paul Heidhues, 2021. "Dynamic coordination via organizational routines," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1001-1047, November.
    3. Johanna Hertel & John Smith, 2013. "Not so cheap talk: costly and discrete communication," Theory and Decision, Springer, vol. 75(2), pages 267-291, August.
    4. Chen, Yi-Chun & Mueller-Frank, Manuel & Pai, Mallesh M., 2022. "Continuous implementation with direct revelation mechanisms," Journal of Economic Theory, Elsevier, vol. 201(C).
    5. Qin, Cheng-Zhong & Yang, Chun-Lei, 2009. "An Explicit Approach to Modeling Finite-Order Type Spaces and Applications," University of California at Santa Barbara, Economics Working Paper Series qt8hq7j89k, Department of Economics, UC Santa Barbara.
    6. Jindapon, Paan & Oyarzun, Carlos, 2013. "Persuasive communication when the sender's incentives are uncertain," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 111-125.
    7. Kovác, Eugen & Mylovanov, Tymofiy, 2009. "Stochastic mechanisms in settings without monetary transfers: The regular case," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1373-1395, July.
    8. Kim, Kyungmin & Pogach, Jonathan, 2014. "Honesty vs. advocacy," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 51-74.
    9. Wonsuk Chung & Rick Harbaugh, 2012. "Biased Recommendations," Working Papers 2012-02, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    10. Angeletos, G.-M. & Lian, C., 2016. "Incomplete Information in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1065-1240, Elsevier.
    11. Alp Atakan & Levent Kockesen & Elif Kubilay, 2017. "Optimal Delegation of Sequential Decisions: The Role of Communication and Reputation," Koç University-TUSIAD Economic Research Forum Working Papers 1701, Koc University-TUSIAD Economic Research Forum.
    12. Qin, Cheng-Zhong & Yang, Chun-Lei, 2013. "Finite-order type spaces and applications," Journal of Economic Theory, Elsevier, vol. 148(2), pages 689-719.
    13. Dekel, Eddie & Siniscalchi, Marciano, 2015. "Epistemic Game Theory," Handbook of Game Theory with Economic Applications,, Elsevier.
    14. Kota Murayama, 2015. "Robust Predictions under Finite Depth of Reasoning," Discussion Paper Series DP2015-28, Research Institute for Economics & Business Administration, Kobe University.
    15. Archishman Chakraborty & Rick Harbaugh, 2010. "Persuasion by Cheap Talk," American Economic Review, American Economic Association, vol. 100(5), pages 2361-2382, December.
      • Archishman Chakraborty & Rick Harbaugh, 2006. "Persuasion by Cheap Talk," Working Papers 2006-10, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy, revised Oct 2009.
    16. Oyama, Daisuke & Tercieux, Olivier, 2012. "On the strategic impact of an event under non-common priors," Games and Economic Behavior, Elsevier, vol. 74(1), pages 321-331.
    17. Annie Liang, 2016. "Games of Incomplete Information Played by Statisticians," PIER Working Paper Archive 16-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Jan 2016.
    18. Stephen Morris & Hyun Song Shin, "undated". "Approximate Common Knowledge and Co-ordination: Recent Lessons from Game Theory," Penn CARESS Working Papers 72042421d029130510780dde2, Penn Economics Department.
    19. Weinstein, Jonathan & Yildiz, Muhamet, 2007. "Impact of higher-order uncertainty," Games and Economic Behavior, Elsevier, vol. 60(1), pages 200-212, July.
    20. Tobias Gesche, 2016. "De-biasing strategic communication," ECON - Working Papers 216, Department of Economics - University of Zurich, revised Sep 2021.

    More about this item

    Keywords

    Communication; Language; Information transmission; Meaning; Common knowledge;
    All these keywords.

    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; Information and Knowledge; Communication; Belief; Unawareness

    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:eee:gamebe:v:109:y:2018:i:c:p:132-155. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    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.