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Wait and See

Author

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  • Yuk-fai Fong

    (Kellogg School of Management, Northwestern University)

  • Peter Eso

    (Kellogg School of Management, Northwestern University)

Abstract

We study a dynamic cheap talk model with multiple senders where the receiver can choose when to make her decision and communication can take place over time. No player has the ability to commit to any action in the future, in particular, the receiver cannot commit to delay the decision. In contrast to the results in static versions of the model, we show that when the senders have common knowledge about the state of the world, there exists an equilibrium with instantenous, full revelation irrespective of the size and direction of the senders’ biases. We show that the equilibrium is robust to the introduction of noise in the senders’ signals about the state. The conditions under which the equilibrium outcome with noisy observation converges to immediate full disclosure as the noise disappears involve the size of the senders’ biases and their patience.

Suggested Citation

  • Yuk-fai Fong & Peter Eso, 2008. "Wait and See," 2008 Meeting Papers 303, Society for Economic Dynamics.
  • Handle: RePEc:red:sed008:303
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    File URL: https://economicdynamics.org/meetpapers/2008/paper_303.pdf
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    References listed on IDEAS

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    8. Ettore Damiano & Hao Li & Wing Suen, 2008. "Delay in Strategic Information Aggregation," Working Papers tecipa-311, University of Toronto, Department of Economics.
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    Cited by:

    1. Golosov, Mikhail & Skreta, Vasiliki & Tsyvinski, Aleh & Wilson, Andrea, 2014. "Dynamic strategic information transmission," Journal of Economic Theory, Elsevier, vol. 151(C), pages 304-341.
    2. Chan, Jimmy & Lizzeri, Alessandro & Suen, Wing & Yariv, Leeat, 2015. "Deliberating Collective Decisions," CEPR Discussion Papers 10466, C.E.P.R. Discussion Papers.
    3. Ambrus, Attila & Lu, Shih En, 2014. "Almost fully revealing cheap talk with imperfectly informed senders," Games and Economic Behavior, Elsevier, vol. 88(C), pages 174-189.

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