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Simple versus rich language in disclosure games

Author

Listed:
  • Jeanne Hagenbach

    (X - École polytechnique)

  • Frédéric Koessler

    (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper studies strategic information disclosure when the sender may not observe the payoff-relevant state, and the receiver may interpret messages naively. We characterize equilibria as a function of the language available to the sender. The language is simple if an informed sender can either fully disclose the state or nothing. The language is rich if he can disclose any closed interval containing the true state. We show that an informed sender and a strategic receiver get a higher ex-ante equilibrium payoff when the language is rich. The reverse holds for a naive receiver and an uninformed sender. Overall, our work suggests that the design of language is key in situations where disclosure is voluntary.

Suggested Citation

  • Jeanne Hagenbach & Frédéric Koessler, 2017. "Simple versus rich language in disclosure games," PSE-Ecole d'économie de Paris (Postprint) hal-01629311, HAL.
  • Handle: RePEc:hal:pseptp:hal-01629311
    DOI: 10.1007/s10058-017-0203-y
    Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/hal-01629311
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    Cited by:

    1. Alessandro Ispano & Peter Schwardmann, 2018. "Competition over Cursed Consumers," CESifo Working Paper Series 7046, CESifo.
    2. S. Nageeb Ali & Greg Lewis & Shoshana Vasserman, 2019. "Voluntary Disclosure and Personalized Pricing," Papers 1912.04774, arXiv.org, revised Aug 2020.

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    More about this item

    Keywords

    Information disclosure; Unravelling; Naive audience; Rich language; Persuasion;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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