Wait and See

Yuk-fai Fong and Peter Eso ()
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Yuk-fai Fong: Kellogg School of Management, Northwestern University

No 303, 2008 Meeting Papers from Society for Economic Dynamics

Abstract: We study a dynamic cheap talk model with multiple senders where the receiver can choose when to make her decision and communication can take place over time. No player has the ability to commit to any action in the future, in particular, the receiver cannot commit to delay the decision. In contrast to the results in static versions of the model, we show that when the senders have common knowledge about the state of the world, there exists an equilibrium with instantenous, full revelation irrespective of the size and direction of the senders’ biases. We show that the equilibrium is robust to the introduction of noise in the senders’ signals about the state. The conditions under which the equilibrium outcome with noisy observation converges to immediate full disclosure as the noise disappears involve the size of the senders’ biases and their patience.

Date: 2008
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed008:303

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