Information Design in Cheap Talk

Qianjun Lyu and Wing Suen

Papers from arXiv.org

Abstract: An uninformed sender publicly commits to an informative experiment about an uncertain state, privately observes its outcome, and sends a cheap-talk message to a receiver. We provide an algorithm valid for arbitrary state-dependent preferences that will determine the sender's optimal experiment and his equilibrium payoff under binary state space. We give sufficient conditions for informative information transmission. These conditions depend more on marginal incentives -- how payoffs vary with the state -- than on the alignment of sender's and receiver's rankings over actions within a state. The algorithm can be easily modified to study the canonical cheap talk game with a perfectly informed sender.

Date: 2022-07, Revised 2024-05
New Economics Papers: this item is included in nep-exp, nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Information Design in Cheap Talk (2023)
Working Paper: Information Design in Cheap Talk (2022)
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