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Perturbed communication games with honest senders and naive receivers

  • Chen, Ying
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    This paper studies communication games in which the sender is possibly honest (tells the truth) and the receiver is possibly naive (follows messages as if truthful). The characterization of message-monotone equilibria in the perturbed games explain several important aspects of strategic communication including sender exaggeration, receiver skepticism and message clustering. Surprisingly, the strategic receiver may respond to more aggressive claims with more moderate actions. In the limit as the probabilities of the non-strategic players approach zero, (i) the limit equilibrium corresponds to a most-informative equilibrium of the limit (Crawford-Sobel) game; (ii) only the top messages are sent.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0022-0531(10)00113-4
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    Article provided by Elsevier in its journal Journal of Economic Theory.

    Volume (Year): 146 (2011)
    Issue (Month): 2 (March)
    Pages: 401-424

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    Handle: RePEc:eee:jetheo:v:146:y:2011:i:2:p:401-424
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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