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Robustness of full revelation in multisender cheap talk

Margaret Meyer (), Inés Moreno de Barreda () and Julia Nafziger
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Margaret Meyer: Nuffield College and Department of Economics, Oxford University, and CEPR
Inés Moreno de Barreda: Department of Economics, University of Oxford, and CEPR

Theoretical Economics, 2019, vol. 14, issue 4

Abstract: This paper studies information transmission in a two-sender, multidimensional cheap talk setting where there are exogenous constraints on the (convex) feasible set of policies for the receiver and where the receiver is uncertain about both the directions and the magnitudes of the senders' bias vectors. With the supports of the biases represented by cones, we prove that whenever there exists an equilibrium which fully reveals the state (a FRE), there exists a robust FRE, i.e. one in which small deviations result in only small punishments. We provide a geometric condition, the Local Deterrence Condition, relating the cones of the biases to the frontier of the policy space, that is necessary and sufficient for the existence of a FRE. We also construct a specific policy rule for the receiver, the Min Rule, that supports a robust FRE whenever one exists.

Keywords: Cheap talk; information transmission; multisender; full revelation; robustness (search for similar items in EconPapers)
JEL-codes: D83 D82 C72 (search for similar items in EconPapers)
Date: 2019-12-02
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Related works:
Working Paper: Robustness of Full Revelation in Multisender Cheap Talk (2016) Downloads
Working Paper: Robustness of Full Revelation in Multisender Cheap Talk (2016) Downloads
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