Multiple Referrals and Multidimensional Cheap Talk
Cheap talk games have been widely used to analyze situations in which a policy maker needs expert advice. In previous work, agent uncertainty has almost always been modeled using a single-dimensional state variable. In this paper we prove that the dimensionality of the uncertain variable has an important qualitative impact on results and yields interesting insights into the 'mechanics' of information transmission. Contrary to the unidimensional case, with more than one dimension full transmission of information in all states of nature is typically possible, provided a very simple and intuitive condition is satisfied. When utilities are quadratic and there are simultaneous reports, linear independence of senders' ideal points is a sufficient condition to guarantee full revelation; with sequential reports, linear independence and a simple condition on the gradients of senders' utilities at the receiver's ideal point are sufficient. In particular as an application of the theory we are able to explain an empirical puzzle related to informational theories of legislative organization. These theories predict that legislative committees (senders) should have strong alignment of preferences with the Floor; but this doesn't fit with empirical facts. We prove that what really matters in transmission of information is the local behavior of the utilities of the senders at the ideal point of the policy maker (receiver), not the distances between the ideal points of players. We interpret this as an argument in support of informational theories of legislative organizations.
|Date of creation:||01 Aug 2000|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Epstein, David, 1998. "Partisan and Bipartisan Signaling in Congress," Journal of Law, Economics and Organization, Oxford University Press, vol. 14(2), pages 183-204, October.
- Daniel Diermeier & Timothy J. Feddersen, 1998. "Information and Congressional Hearings," Discussion Papers 1236, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Baliga, Sandeep, 1999. "Monitoring and Collusion with "Soft" Information," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(2), pages 434-440, July.
- Vijay Krishna & John Morgan, 2001.
"A Model of Expertise,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 116(2), pages 747-775.
- Vijay Krishna & John Morgan, 1999. "A Model of Expertise," Game Theory and Information 9902003, EconWPA.
- Vijay Krishna & John Morgan, 1999. "A Model of Expertise," Working Papers 154, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics.
- Krishna, V. & Morgan, J., 1999. "A Model of Expertise," Papers 206, Princeton, Woodrow Wilson School - Public and International Affairs.
- Farrell, Joseph & Gibbons, Robert, 1989. "Cheap Talk with Two Audiences," American Economic Review, American Economic Association, vol. 79(5), pages 1214-1223, December.
- Farrell, J. & Gibbons, R., 1989. "Cheap Talk With Two Audiences," Working papers 518, Massachusetts Institute of Technology (MIT), Department of Economics.
- repec:pri:wwseco:dp206 is not listed on IDEAS
- Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
- Paul R. Milgrom & John Roberts, 1985. "Relying on the Information of Interested Parties," Cowles Foundation Discussion Papers 749, Cowles Foundation for Research in Economics, Yale University.
- Austen-Smith David, 1993. "Interested Experts and Policy Advice: Multiple Referrals under Open Rule," Games and Economic Behavior, Elsevier, vol. 5(1), pages 3-43, January.
- Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1557. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.