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Two-sided Strategic Information Transmission

Author

Listed:
  • Saori Chiba

    (Kyoto University, Graduate School of Economics)

  • Kazumi Hori

    (Kyoto University, Graduate School of Economics)

Abstract

We study a cheap talk model in which a decision maker and an expert are both privately informed. Both players observe independent signals that jointly determine ideal actions for the players. Furthermore, in our model, the decision maker can send a cheap talk message to the expert, which is followed by the expert’s cheap talk and then the decision maker’s decision making. We show that the informed decision maker can informatively reveal her private information to the expert but her talk does not affect the quality of the expert’s information transmission in models in which optimal actions are only additively or multiplicatively separable in the two players’ information, and their preferences are represented by quadratic loss functions. We also apply our finding to a decision maker’s information acquisition problem.

Suggested Citation

  • Saori Chiba & Kazumi Hori, 2020. "Two-sided Strategic Information Transmission," KIER Working Papers 1029, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1029
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP1029.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Cheap Talk; Two-Sided Asymmetric Information; Two-Way Communication;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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