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Informed communication equilibrium

Author

Listed:
  • Koessler, Frederic

    (Department of Economics and Decision Sciences, HEC Paris - CNRS)

  • Skreta, Vasiliki

    (Department of Economics, University of Texas at Austin and Department of Economics, University College London)

Abstract

We consider a privately informed principal selecting a communication device to influence players' actions. In contrast to standard information design, the principal cannot commit ex-ante, and the device must elicit information from all players. We define an informed communication equilibrium (informed CE) as a perfect Bayesian equilibrium outcome of this informed communication design game. We show that the set of informed CE is the subset of communication equilibria (CE) that yield principal payoff vectors bounded below by an equilibrium payoff vector of the silent game, under some consistent interim beliefs. The ex-ante optimal CE may fail to be an informed CE. We provide sufficient conditions for a CE to be an informed CE and identify classes of games in which CE and informed CE coincide.

Suggested Citation

  • Koessler, Frederic & Skreta, Vasiliki, 0. "Informed communication equilibrium," Theoretical Economics, Econometric Society.
    • Handle: RePEc:the:publsh:6733
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    References listed on IDEAS

    as
    1. Yilankaya, Okan, 1999. "A Note on the Seller's Optimal Mechanism in Bilateral Trade with Two-Sided Incomplete Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 267-271, July.
    2. Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-1385, November.
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    More about this item

    Keywords

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    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

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