Dynamic communication with biased senders
Chiara Margaria and
Alex Smolin ()
Games and Economic Behavior, 2018, vol. 110, issue C, 330-339
We study dynamic games in which senders with state-independent payoffs communicate to a single receiver. Senders' private information evolves according to an aperiodic and irreducible Markov chain. We prove an analog of a folk theorem—that any feasible and individually rational payoff can be approximated in a perfect Bayesian equilibrium if players are sufficiently patient. In particular, there are equilibria in which the receiver makes perfectly informed decisions in almost every period, even if no informative communication can be sustained in the stage game. We conclude that repeated interaction can overcome strategic limits of communication.
Keywords: Bayesian games; Repeated games; Communication; Folk theorem (search for similar items in EconPapers)
JEL-codes: C72 C73 D82 D83 (search for similar items in EconPapers)
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Working Paper: Dynamic Communication with Biased Senders (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:110:y:2018:i:c:p:330-339
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