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Modes of ambiguous communication

Christian Kellner () and Mark Le Quement

Games and Economic Behavior, 2017, vol. 104, issue C, 271-292

Abstract: We study cheap talk communication in a simple two actions-two states model featuring an ambiguous state distribution. Equilibrium behavior of both sender (S) and receiver (R) features mixing and we relate each agent's randomization to a specific mode of ambiguous communication. For sufficiently high ambiguity, implementing the S-optimal decision rule with only two messages is impossible if R has aligned preferences. This may in contrast be possible if R has misaligned preferences. Adding a little ambiguity may generate influential communication that is unambiguously advantageous to S.

Keywords: Cheap talk; Ambiguity (search for similar items in EconPapers)
JEL-codes: D81 D83 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Mode of ambiguous communication (2013) Downloads
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DOI: 10.1016/j.geb.2017.03.010

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