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Information Revelation and Coordination Using Cheap Talk in a Game with Two-Sided Private Information

Chirantan Ganguly and Indrajit Ray ()
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Chirantan Ganguly: Management School, Queen's University Belfast,

CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA

Abstract: We consider a Bayesian game, namely the Battle of the Sexes with private information, in which each player has two types, High and Low. We allow cheap talk regarding players' types before the game. We prove that the unique fully revealing symmetric cheap talk equilibrium exists (for a low range of prior probability of the High-type) and has a desirable type-coordination property : it fully coordinates on the ex-post efficient pure Nash equilibrium when the players' types are different. Type-coordination is also obtained in a partially revealing equilibrium in which only the High-type is not truthful, for a medium range of prior probability of the High-type. We also prove that there is no (non-babbling) truthful cheap talk equilibrium if only one player talks.

Keywords: Battle of the Sexes; Private Information; Cheap Talk; Coordination; Full Revelation. JEL classification numbers: C72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic
Date: 2017
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https://warwick.ac.uk/fac/soc/economics/research/c ... e/35_-_creta_ray.pdf

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Working Paper: Information-Revelation and Coordination Using Cheap Talk in a Game with Two-Sided Private Information (2015) Downloads
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