Commitment and Randomization in Communication

Emir Kamenica and Xiao Lin

Papers from arXiv.org

Abstract: When does Sender, in a Sender-Receiver game, strictly value commitment? In a setting with finitely many actions and states, we establish that, generically, commitment has no value if and only if a partitional experiment is optimal. Moreover, if Sender's preferred cheap-talk equilibrium necessarily involves randomization, then Sender values commitment. Our results imply that if a school values commitment to a grading policy, then the school necessarily prefers to grade unfairly. We also ask: for what share of preference profiles does commitment have no value? For any state space, if there are $\left|A\right|$ actions, the share is at least $\frac{1}{\left|A\right|^{\left|A\right|}}$. As the number of states grows large, the share converges precisely to $\frac{1}{\left|A\right|^{\left|A\right|}}$.

Date: 2024-10, Revised 2025-05
New Economics Papers: this item is included in nep-des, nep-exp, nep-gth and nep-mic
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