Beneficial mediated communication in cheap talk

Maxim Ivanov

Journal of Mathematical Economics, 2014, vol. 55, issue C, 129-135

Abstract: This paper investigates mediated communication between an informed sender and an uninformed receiver with conflicting preferences in the framework of Crawford and Sobel (1982). It provides a simple condition for mediation to be beneficial, that is, to give the receiver a higher ex-ante payoff than the uninformed decision. This condition in turn allows us to identify scenarios in which mediation is beneficial while all cheap-talk equilibria are uninformative. Our condition extends the conditions for beneficial mediation with a binary type space (Mitusch and Strausz, 2005) and mediation via a biased mediator (Ambrus et al., 2013). Finally, we show the connection between the identified condition and related conditions in other conflict resolution schemes: delegation (Alonso and Matouschek, 2008) and arbitration (Kovác and Mylovanov, 2009).

Keywords: Cheap talk; Communication; Mediation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:55:y:2014:i:c:p:129-135

DOI: 10.1016/j.jmateco.2014.09.004

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