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Information Design in Cheap Talk

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  • Qianjun Lyu
  • Wing Suen

Abstract

An uninformed sender publicly commits to an informative experiment about an uncertain state, privately observes its outcome, and sends a cheap-talk message to a receiver. We provide an algorithm valid for arbitrary state-dependent preferences that will determine the sender's optimal experiment and his equilibrium payoff under binary state space. We give sufficient conditions for informative information transmission. These conditions depend more on marginal incentives -- how payoffs vary with the state -- than on the alignment of sender's and receiver's rankings over actions within a state. The algorithm can be easily modified to study the canonical cheap talk game with a perfectly informed sender.

Suggested Citation

  • Qianjun Lyu & Wing Suen, 2022. "Information Design in Cheap Talk," Papers 2207.04929, arXiv.org, revised May 2024.
    • Handle: RePEc:arx:papers:2207.04929
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    References listed on IDEAS

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    1. Inga Deimen & Dezső Szalay, 2019. "Delegated Expertise, Authority, and Communication," American Economic Review, American Economic Association, vol. 109(4), pages 1349-1374, April.
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    Cited by:

    1. Mark Whitmeyer & Kun Zhang, 2022. "Costly Evidence and Discretionary Disclosure," Papers 2208.04922, arXiv.org.

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    More about this item

    JEL classification:

    • 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

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