Strategic information transmission with sender’s approval: the single crossing case
Sémirat, Stéphan; Forges, Françoise (2021), Strategic information transmission with sender’s approval: the single crossing case. https://basepub.dauphine.psl.eu/handle/123456789/22142
TypeDocument de travail / Working paper
External document linkhttps://hal.archives-ouvertes.fr/hal-03231673
Series titleworking paper GAEL
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Abstract (EN)We consider a sender-receiver game, in which the sender has finitely many types and the receiver’s decision is a real number. We assume that utility functions are concave, single-peaked and single-crossing. After the cheap talk phase, the receiver makes a decision, which requires the sender’s approval to be implemented. Otherwise, the sender “exits”. At a perfect Bayesian equilibrium without exit, the receiver must maximize his expected utility subject to the participation constraints of all positive probability types.This necessary condition may not hold at the receiver’s prior belief, so that a non-revealing equilibrium may fail to exist. Similarly, a fully revealing equilibrium may not exist either due to the sender’s incentive compatibility conditions. We propose a constructive algorithm that always achieves a perfect Bayesian equilibrium without exit.
Subjects / KeywordsApproval; cheap talk; sender-receiver game; participation constraints; single-crossing; C72, D82
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