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Toxic types and infectious communication breakdown

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  • Eliaz, Kfir
  • Frug, Alexander

Abstract

We study an environment where an informed sender has conflicting interests with an uninformed receiver only in some states. Using an “infection-like” argument, we show that with symmetric loss functions, the presence of such disagreement states - even if they are very rare - leads to coarse communication in all states, even those where, following communication, it is commonly known that the players' interests are perfectly aligned. However, with asymmetric loss functions, one can construct examples with truthful communication in some set of states.

Suggested Citation

  • Eliaz, Kfir & Frug, Alexander, 2023. "Toxic types and infectious communication breakdown," Games and Economic Behavior, Elsevier, vol. 142(C), pages 718-729.
    • Handle: RePEc:eee:gamebe:v:142:y:2023:i:c:p:718-729
    DOI: 10.1016/j.geb.2023.09.010
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    References listed on IDEAS

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    More about this item

    Keywords

    Cheap talk; Contagion;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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