Communication between unbiased agents

Francesc Dilme

Games and Economic Behavior, 2023, vol. 142, issue C, 613-622

Abstract: We examine a version of the model of Crawford and Sobel (1982) in which agents are not biased, but their preferences are not necessarily smooth. In this situation, we show that communication converges to full information transmission as the number of messages used for communication increases if and only if the sender and the receiver have the same local relative preferences for avoiding small “upward” or “downward” mistakes. When these conditions fail, either an arbitrarily small bias or an arbitrarily small noise in the observation of the state may make communication very coarse in all equilibria, even when the message space is infinite. Hence, contrary to what was previously thought, continuity of preferences and close alignment between the sender's and receiver's ideal actions do not guarantee the existence of equilibria with precise information transmission.

Keywords: Strategic communication; Unbiased agents; Skewed preferences (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:142:y:2023:i:c:p:613-622

DOI: 10.1016/j.geb.2023.09.008

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