Communication and Learning

Luca Anderlini, Dino Gerardi and Roger Lagunoff

No 82, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: We study strategic information transmission in an organization consisting of an infinite sequence of individual decision makers. Each decision maker chooses an action and receives an informative but imperfect signal of the once-and-for-all realization of an unobserved state. The state affects all individuals' preferences over present and future decisions. Decision makers do not directly observe the realized signals or actions of their predecessors. Instead, they must rely on cheap-talk messages in order to accumulate information about the state. Each decision maker is therefore both a receiver of information with respect to his decision, and a sender with respect to all future decisions. We show that if preferences are not perfectly aligned "full learning" equilibria - ones in which the individuals' posterior beliefs eventually place full weight on the true state - do not exist. This is so both in the case of private communication, in which each individual only hears the message of his immediate predecessor, and in the case of public communication, in which a decision maker hears the message of all his predecessors. Surprisingly, in the latter case full learning may be impossible even in the limit as all members of the organization become infinitely patient. We also consider the case where all individuals have access to a mediator who can work across time periods arbitrarily far apart. In this case full learning equilibria exist.

Keywords: Communication; Learning; Dynamic Strategic Information Transmission (search for similar items in EconPapers)
JEL-codes: C70 C72 C73 D80 D83 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2008, Revised 2010
New Economics Papers: this item is included in nep-cta and nep-gth
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Related works:
Journal Article: Communication and Learning (2012)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
Working Paper: Communication and Learning (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:82

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