Modes of ambiguous communication
Christian Kellner () and
Mark Le Quement
Games and Economic Behavior, 2017, vol. 104, issue C, 271-292
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)
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Working Paper: Mode of ambiguous communication (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:104:y:2017:i:c:p:271-292
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