Informationally Robust Cheap-Talk

Itai Arieli, Ronen Gradwohl and Rann Smorodinsky

Papers from arXiv.org

Abstract: We study the robustness of cheap-talk equilibria to infinitesimal private information of the receiver in a model with a binary state-space and state-independent sender-preferences. We show that the sender-optimal equilibrium is robust if and only if this equilibrium either reveals no information to the receiver or fully reveals one of the states with positive probability. We then characterize the actions that can be played with positive probability in any robust equilibrium. Finally, we fully characterize the optimal sender-utility under binary receiver's private information, and provide bounds for the optimal sender-utility under general private information.

Date: 2023-02
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
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