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Strategic Communication with Negative Reciprocity and Endogenous Preferences

Author

Listed:
  • Eilat, Ran
  • Eliaz, Kfir

Abstract

We incorporate negative reciprocity into strategic information transmission and study how a receiver’s response to perceived manipulation shapes equilibrium outcomes. We examine both an information-design environment, in which the sender can commit to an information structure, and a cheap-talk environment, in which commitment is not possible. In each setting, the receiver's behavior or preferences shift adversarially against the sender as the sender's strategy becomes less accurate. We analyze and solve these communication games in the presence of negative reciprocity, even when it generates endogenous preferences, and we characterize the novel ways in which classical results are altered. Our findings link information design to behavioral economics highlighting the implications of design-dependent preferences.

Suggested Citation

  • Eilat, Ran & Eliaz, Kfir, 2026. "Strategic Communication with Negative Reciprocity and Endogenous Preferences," CEPR Discussion Papers 21360, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:21360
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    File URL: https://cepr.org/publications/DP21360
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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