Vertical conflict of interest and horizontal inequities

S. Sémirat

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: We analyze a cheap talk game, à la Crawford and Sobel, in a two dimensional framework, with uniform prior, quadratic preferences and binary signaling rule. Credible information is revealed from the Sender to the Receiver when the conflict of interest vanishes through the alternative issues. The literature has focused on symmetrical equilibria and their sustainability upon limited exogenous asymmetry in preferences. We exhibit a second type of equilibrium, with endogenous asymmetry with respect to the revealed information. This type of equilibrium occurs with or without conflict of interest between the players, and is introduced by the multi-dimensionality. However, the conflict of interest conditions the design of decisions and their intrinsic meaning. Finally, we derive the existence of an influential equilibria for any conflict of interest.

Keywords: CHEAP TALK; ASYMMETRIC INFORMATION; INEQUITY (search for similar items in EconPapers)
JEL-codes: D63 D82 D84 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-gth, nep-mic and nep-sog
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Persistent link: https://EconPapers.repec.org/RePEc:gbl:wpaper:2016-06

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