Strategic information transmission with sender's approval: the single-crossing case

S. Sémirat and F. Forges

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: We consider a sender-receiver game, in which the sender has finitely many types and the receiver's decision is a real number. We assume that utility functions are concave, single-peaked and single-crossing. After the cheap talk phase, the receiver makes a decision, which requires the sender's approval to be implemented. Otherwise, the sender "exits". At a perfect Bayesian equilibrium without exit, the receiver must maximize his expected utility subject to the participation constraints of all positive probability types. This necessary condition may not hold at the receiver's prior belief, so that a non-revealing equilibrium may fail to exist. Similarly, a fully revealing equilibrium may not exist either due to the sender's incentive compatibility conditions. We propose a constructive algorithm that always achieves a perfect Bayesian equilibrium without exit.

Keywords: APPROVAL; CHEAP TALK; SENDER-RECEIVER GAME; PARTICIPATION CONSTRAINTS; SINGLE-CROSSING (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gbl:wpaper:2021-03

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