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Multi-period competitive cheap talk with very biased experts

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  • Eric Schmidbauer

    (University of Central Florida, Orlando, FL)

Abstract

Each of n experts communicates with a principal about the privately observed quality of the expert's own project via cheap talk, with new independently drawn projects available each period until the principal adopts one. Even when experts are very biased in that they only receive a positive payoff if their own project is selected, we show that informative equilibria may exist, characterize the set of stationary equilibria, and nd the Pareto dominant symmetric equilibrium. Experts face a tradeoff between inducing acceptance now versus waiting for a better project should the game continue. When the future is more highly valued experts send more informative messages, increasing the average quality of an adopted project and resulting in a Pareto improvement, while communication is harmed and payoffs can decline when there is more competition between experts.

Suggested Citation

  • Eric Schmidbauer, 2016. "Multi-period competitive cheap talk with very biased experts," Working Papers 2016-04, University of Central Florida, Department of Economics.
  • Handle: RePEc:cfl:wpaper:2016-04
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    cheap talk; multiple senders; competition;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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