Communication Games with Optional Verification

Simon Schopohl ()
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Simon Schopohl: Universität Bielefeld = Bielefeld University, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UCL - Université Catholique de Louvain = Catholic University of Louvain, EDEEM - European Doctorate in Economics Erasmus Mundus - UP1 - Université Paris 1 Panthéon-Sorbonne - Universität Bielefeld = Bielefeld University - UCL - Université Catholique de Louvain = Catholic University of Louvain - EHESS - École des hautes études en sciences sociales - UvA - University of Amsterdam [Amsterdam] = Universiteit van Amsterdam - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon - Université de Venise Ca’ Foscari | Università Ca’ Foscari di Venezia

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We consider a Sender-Receiver game in which the Sender can choose between sending a cheap-talk message, which is costless, but also not verified and a costly verified message. While the Sender knows the true state of the world, the Receiver does not have this information, but has to choose an action depending on the message he receives. The action then yields to some utility for Sender and Receiver. We only make a few assumptions about the utility functions of both players, so situations may arise where the Sender's preferences are such that she sends a message trying to convince the Receiver about a certain state of the world, which is not the true one. In a finite setting we state conditons for full revelation, i.e. when the Receiver always learns the truth. Furthermore we describe the player's behavior if only partial revelation is possible. For a continuous setting we show that additional conditions have to hold and that these do not hold for "smooth" preferences and utility, e.g. in the classic example of quadratic loss utilities.

Keywords: cheap-talk; communication; costly disclosure; full revelation; increasing differences; Sender-Receiver game; verifiable information (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-hpe, nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01490688v1
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Published in 2017

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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-01490688

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