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Dynamic Strategic Information Transmission

  • Mikhail Golosov

    (Yale University and NES)

  • Vasiliki Skreta

    (New York University, Stern School of Business)

  • Aleh Tsyvinski

    (Yale University and NES)

  • Andrea Wilson

    (New York University)

This paper studies strategic information transmission in a dynamic environment where, each period, a privately informed expert sends a message and a decision maker takes an action. Our main result is that, in contrast to a static environment, full information revelation is possible. The gradual revelation of information and the eventual full revelation is supported by the dynamic rewards and punishments. The construction of a fully revealing equilibrium relies on two key features. The first feature is that the expert is incentivized, via appropriate actions, to join separable groups in which she initially pools with far-away types, then later reveals her type. The second feature is the use of trigger strategies. The decision maker is incentivized by the reward of further information revelation if he chooses the separation-inducing actions, and the threat of a stop in information release if he does not. Our equilibrium is non-monotonic. With monotonic partition equilibria, full revelation is impossible.

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Paper provided by Einaudi Institute for Economics and Finance (EIEF) in its series EIEF Working Papers Series with number 1110.

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Length: 48 pages
Date of creation: 2011
Date of revision: May 2011
Handle: RePEc:eie:wpaper:1110
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  1. Mathis, Jérôme, 2008. "Full revelation of information in Sender-Receiver games of persuasion," Journal of Economic Theory, Elsevier, vol. 143(1), pages 571-584, November.
  2. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
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  4. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "Communication and Learning," Levine's Bibliography 122247000000001868, UCLA Department of Economics.
  5. Balinga, Sandeep & Sjostrom, Tomas, 2001. "Arms Races and Negotiations," Working Papers 3-01-2, Pennsylvania State University, Department of Economics.
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  9. Susan Athey & Ilya Segal, 2007. "An Efficient Dynamic Mechanism," Levine's Bibliography 122247000000001134, UCLA Department of Economics.
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  14. Koessler, Frédéric & Forges, Françoise, 2008. "Multistage communication with and without verifiable types," Economics Papers from University Paris Dauphine 123456789/1121, Paris Dauphine University.
  15. Renault, Jérôme & Solan, Eilon & Vieille, Nicolas, 2013. "Dynamic sender–receiver games," Journal of Economic Theory, Elsevier, vol. 148(2), pages 502-534.
  16. Sandeep Baliga & Tomas Sjostrom, 2012. "The Strategy of Manipulating Conflict," American Economic Review, American Economic Association, vol. 102(6), pages 2897-2922, October.
  17. Robert J. Aumann & Sergiu Hart, 2002. "Long Cheap Talk," Discussion Paper Series dp284, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem, revised Nov 2002.
  18. Sandeep Baliga & Tomas Sjöström, 2008. "Strategic Ambiguity and Arms Proliferation," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1023-1057, December.
  19. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
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