A note on optimal cheap talk equilibria in a discrete state space

Alexander Frug

Games and Economic Behavior, 2016, vol. 99, issue C, 180-185

Abstract: A discrete version of Crawford and Sobel's (1982) cheap talk model is considered. Unlike in the continuous case, limiting attention to partitional equilibria is with loss of generality. The need to consider equilibria that are non-partitional complicates the analysis. It is shown that if utility functions are concave and the sender is upwardly biased, then the receiver's optimal equilibrium is necessarily partitional. Based on this result, a simple characterization of the optimal equilibrium for the discrete uniform quadratic case is proposed.

Keywords: Discrete cheap talk; Partitional equilibria (search for similar items in EconPapers)
JEL-codes: D83 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:99:y:2016:i:c:p:180-185

DOI: 10.1016/j.geb.2016.08.004

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