Toxic types and infectious communication breakdown

Kfir Eliaz and Alexander Frug

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We introduce a new channel for breakdown of cheap talk communication between an informed sender and an uninformed receiver. Our framework has the following novel feature: conditional on interacting, both parties agree on the optimal action in each state, but there are sender types with which the receiver prefers not to interact. We show that for a broad class of preferences, any interval equilibrium induces only finitely many actions in the support of the receiver's strategy. We also show that introducing a second stage with noisy signals on the sender type has a dramatic effect on the firststage communication.

Keywords: Cheap talk; contagion (search for similar items in EconPapers)
JEL-codes: D83 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-mic
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Related works:
Working Paper: Toxic Types and Infectious Communication Breakdown (2020)
Working Paper: Toxic Types and Infectious Communication Breakdown (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1759

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