Robustness of Full Revelation in Multisender Cheap Talk
InÃ©s Moreno de Barreda and
No 789, Economics Series Working Papers from University of Oxford, Department of Economics
This paper studies information transmission in a two-sender, multidimensional cheap talk setting where there are exogenous constraints on the (convex) feasible set of policies for the receiver and where the receiver is uncertain about both the directions and the magnitudes of the sendersâ€™ bias vectors. With the supports of the biases represented by cones, we prove that whenever there exists an equilibrium which fully reveals the state (a FRE), there exists a robust FRE, i.e. one in which small deviations result in only small punishments. We provide a geometric condition, the Local Deterrence Condition, relating the cones of the biases to the frontier of the policy space, that is necessary and sufficient for the existence of a FRE. We also construct a specific policy rule for the receiver, the Min Rule, that supports a robust FRE whenever one exists. Revised January 2019
Keywords: Cheap talk; information transmission; multisender; full revelation; robustness (search for similar items in EconPapers)
JEL-codes: D83 D82 C72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-gth and nep-mic
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