Multistage communication with and without verifiable types
We survey the main results on strategic information transmission, which is often referred to as ``persuasion" when types are verifiable and as ``cheap talk" when they are not. In the simplest ``cheap talk'' model, an informed player sends a single message to a receiver who makes a decision. The players' utilities depend on the sender's information and the receiver's decision, but not on the sender's message. Furthermore, the messages that are available to the sender do not depend on his true information. As is well-known, such a unilateral ``cheap talk" can affect the sender's decision at equilibrium. In a more general model, both players can exchange simultaneous costless messages during several stages before the final decision. The utility functions are unchanged. Multistage conversation allows the players to reach more equilibrium outcomes, which possibly Pareto dominate the original ones. More precisely, the set of equilibrium outcomes of long cheap talk games is fully characterized; it increases with the number of communication stages and can become even larger if no deadline is imposed. Concentrating on cheap talk is not appropriate if the informed player can influence the decision maker by producing unfalsifiable documents. In order to capture this possibility formally, one assumes that the informed player's set of messages depends on his private information. The literature has mostly dealt with unilateral persuasion. But multistage, bilateral communication enables the players to reach more equilibrium outcomes in the case of verifiable types as in the case of unverifiable ones. Equilibria of long persuasion games are fully characterized when information can be certified at any precision level.
|Date of creation:||Sep 2006|
|Contact details of provider:|| Postal: 33, boulevard du port - 95011 Cergy-Pontoise Cedex|
Phone: 33 1 34 25 60 63
Fax: 33 1 34 25 62 33
Web page: http://thema.u-cergy.fr
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.:
- Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476, December.
- Daniel J. Seidmann & Eyal Winter, 1997. "Strategic Information Transmission with Verifiable Messages," Econometrica, Econometric Society, vol. 65(1), pages 163-170, January.
- Watson, Joel, 1996. "Information Transmission When the Informed Party Is Confused," Games and Economic Behavior, Elsevier, vol. 12(1), pages 143-161, January.
- Blume Andreas, 1994.
"Equilibrium Refinements in Sender-Receiver Games,"
Journal of Economic Theory,
Elsevier, vol. 64(1), pages 66-77, October.
- Blume, A., 1991. "Equilibrium Refinement in Sender-Receiver Games," Working Papers 91-28, University of Iowa, Department of Economics.
- Blume, A., 1993. "Equilibrium Refinement in Sender-Receiver Games," Working Papers 93-06, University of Iowa, Department of Economics.
- Blume, A., 1992. "Equilibrium Refinements in Sender-Receiver Games," Working Papers 92-12, University of Iowa, Department of Economics.
- Jérôme Renault, 2001. "3-player repeated games with lack of information on one side," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(2), pages 221-245.
- repec:dau:papers:123456789/6109 is not listed on IDEAS
- Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.