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Strategic interpretations

Author

Listed:
  • Eliaz, Kfir
  • Spiegler, Ran
  • Thysen, Heidi C.

Abstract

We study strategic communication when the sender's multi-dimensional messages are given an interpretation by the sender himself or by a proxy. Interpreting messages involves the provision of some data about their statistical state-dependence. Interpretation can be selective: different kinds of data interpret different sets of message components. The receiver uses this data to decipher messages, yet he does not draw any inferences from the kind of data he is given. In this way, strategic interpretation of messages can influence the receiver's understanding of their equilibrium meaning. We show that in a two-action, two-state setting, the sender can attain his first-best payoff when the prior on one state exceeds a threshold that decays quickly with message dimensionality. We examine the result's robustness to the critique that our receiver does not attempt any inferences from selective interpretations.

Suggested Citation

  • Eliaz, Kfir & Spiegler, Ran & Thysen, Heidi C., 2021. "Strategic interpretations," Journal of Economic Theory, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:jetheo:v:192:y:2021:i:c:s0022053121000090
    DOI: 10.1016/j.jet.2021.105192
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    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. Eliaz, Kfir & Spiegler, Ran, 0. "News media as suppliers of narratives (and information)," Theoretical Economics, Econometric Society.
    3. Eliaz, Kfir & Spiegler, Ran & Thysen, Heidi C., 2021. "Persuasion with endogenous misspecified beliefs," European Economic Review, Elsevier, vol. 134(C).
    4. Clyde, Alexander, 2025. "Proxy variables and feedback effects in decision making," Games and Economic Behavior, Elsevier, vol. 153(C), pages 408-429.
    5. Spiegler, Ran, 2021. "Modeling players with random “data access”," Journal of Economic Theory, Elsevier, vol. 198(C).
    6. Joshua Schwartzstein & Adi Sunderam, 2021. "Using Models to Persuade," American Economic Review, American Economic Association, vol. 111(1), pages 276-323, January.
    7. Alessandro Ispano, 2025. "The perils of a coherent narrative," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 80(3), pages 745-759, November.

    More about this item

    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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