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Relational Communication

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  • Anton Kolotilin

    (School of Economics, UNSW Business School)

  • Hongyi

    (School of Economics, UNSW Business School)

Abstract

We study a communication game between an informed sender and an uninformed receiver with repeated interactions and voluntary transfers. Transfers motivate the receiver’s decision-making and signal the sender’s information. Although full separation can always be supported in equilibrium, partial or complete pooling is optimal if the receiver’s decision-making is highly responsive to information. In this case, the receiver’s decision-making is disciplined by pooling extreme states, where she is most tempted to defect.

Suggested Citation

  • Anton Kolotilin & Hongyi, 2020. "Relational Communication," Discussion Papers 2018-12b, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2018-12b
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    More about this item

    Keywords

    strategic communication; relational contracts;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • 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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