Cheap Talk with Correlated Signals

A.K.S. Chand, Sergio Currarini and Giovanni Ursino

No def024, DISCE - Working Papers del Dipartimento di Economia e Finanza from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: We consider a game of information transmission, with one informed decision maker gathering information from one or more informed senders. Private information is (conditionally) correlated across players, and communication is cheap talk. For the one sender case, we show that correlation unambiguously tightens the existence conditions for a truth-telling equilibrium. We then generalize the model to an arbitrary number of senders, and we find that, in this case, the effect of correlation on the incentives to report information truthfully is non monotone, and correlation may discipline senders equilibrium behavior, making it easier to sustain truth-telling.

Keywords: Cheap Talk; Multiple Senders; Correlation (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Pages: 23
Date: 2015-05
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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http://dipartimenti.unicatt.it/economia-finanza-def024.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Cheap Talk with Correlated Signals (2013)
Working Paper: Cheap Talk with Correlated Signals (2013)
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