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Strategic communication networks

Jeanne Hagenbach and Frederic Koessler

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We consider situations in which individuals would like to choose an action which is close to that of others, as well as close to a state of nature, with the ideal proximity to the state varying across agents. Before this coordination game is played, a cheap-talk communication stage is offered to the indivisuals who decide to whom they reveal their private information about the state. The information transmission occurring in the communication stage is characterized by a strategic communication network. We provide an explicit link between players' preferences and the equilibrium strategic communication networks. A key feature of our equilibrium characterization is that whether communication takes place between two agents not only depends on the conflict of interest between these agents, but also on the number and preferences of the other agents with whom they communicate. Apart from some specific cases, the equilibrium communication networks are quite complex despite our simple one-dimensional description of preference heterogeneity. In general, strategic communication networks cannot be completely Pareto-ranked, but expected social welfare always increases as the communication network expands

Keywords: Cheap talk; coordination; incomplete information; networks (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 D85 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2009-02
New Economics Papers: this item is included in nep-cse, nep-cta, nep-gth, nep-net and nep-soc
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Citations: View citations in EconPapers (6) Track citations by RSS feed

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ftp://mse.univ-paris1.fr/pub/mse/CES2009/09005.pdf (application/pdf)

Related works:
Journal Article: Strategic Communication Networks (2010) Downloads
Working Paper: Strategic Communication Networks (2009) Downloads
Working Paper: Strategic Communication Networks (2009) Downloads
Working Paper: Strategic communication networks (2008) Downloads
Working Paper: Strategic communication networks (2008) Downloads
Working Paper: Strategic communication networks (2008) Downloads
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