Reputation for competence in a cheap-talk setting

Georgy Lukyanov ()

Research in Economics, 2023, vol. 77, issue 3, 285-294

Abstract: This paper develops a uniform-quadratic cheap-talk setting of Crawford add Sobel (1982), in which the sender may be uninformed and cares about his reputation for competence (that is, for being informed). We establish the existence of a partition equilibrium with two messages and show how this equilibrium is affected when we change the exogenous parameters: the sender’s bias, the initial belief that the sender is competent and the sender’s reputational concerns. We also show that if the reputational concerns are high enough and the sender’s initial reputation is extremely low or extremely high, there exists a fully informative equilibrium in which the competent sender perfectly reveals the state. Possible extensions of the setup are discussed. One possible application of our model might be the interaction between media provider and the public.

Keywords: Cheap talk; Reputation; Informativeness (search for similar items in EconPapers)
JEL-codes: C72 D83 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:77:y:2023:i:3:p:285-294

DOI: 10.1016/j.rie.2023.05.001

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