Cheap talk with private signal structures

Maxim Ivanov and Alex Sam

Games and Economic Behavior, 2022, vol. 132, issue C, 288-304

Abstract: The paper considers a cheap-talk model in which the receiver privately selects the signal structure of the initially uninformed sender. After the sender privately observes a signal generated by the signal structure, the players play a standard cheap-talk game. We show that by randomizing between two perfectly informative signal structures, the receiver can elicit perfect information from the sender for the bias in preferences of any magnitude, including the case when the bias is the sender's private information. We provide the precise and simple characterization of pairs of such signal structures. The key idea is that they play a dual role: shaping the sender's posterior beliefs and the receiver's reaction to the sender's messages. These factors complement each other and jointly serve as the counterbalancing force that eliminates the sender's incentives to misreport information.

Keywords: Strategic communication; Information design; Bayesian persuasion (search for similar items in EconPapers)
JEL-codes: C72 D81 D82 D83 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:132:y:2022:i:c:p:288-304

DOI: 10.1016/j.geb.2022.01.005

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