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Strategic information transmission with sender's approval: The single-crossing case

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  • Sémirat, Stéphan
  • Forges, Françoise

Abstract

We consider games in which an informed sender first talks at no cost to a receiver; then, the latter proposes a decision and, finally, the sender accepts the proposal or “exits”. We make the following assumptions: the sender has finitely many types, the receiver's decision is real-valued, utility functions over decisions are concave, single-peaked and single-crossing, exit is damaging to the receiver. In this setup, it may happen that babbling equilibria necessarily involve exit. We nevertheless propose a constructive algorithm that achieves a pure perfect Bayesian equilibrium without exit in every game of the class considered.

Suggested Citation

  • Sémirat, Stéphan & Forges, Françoise, 2022. "Strategic information transmission with sender's approval: The single-crossing case," Games and Economic Behavior, Elsevier, vol. 134(C), pages 242-263.
  • Handle: RePEc:eee:gamebe:v:134:y:2022:i:c:p:242-263
    DOI: 10.1016/j.geb.2022.05.004
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    References listed on IDEAS

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    1. Shimizu, Takashi, 2013. "Cheap talk with an exit option: The case of discrete action space," Economics Letters, Elsevier, vol. 120(3), pages 397-400.
    2. Françoise Forges & Jérôme Renault, 2021. "Strategic information transmission with sender’s approval," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(2), pages 475-502, June.
    3. Takashi Shimizu, 2017. "Cheap talk with an exit option: a model of exit and voice," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1071-1088, November.
    4. Françoise Forges & Jérôme Renault, 2021. "Strategic information transmission with sender’s approval," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(2), pages 475-502, June.
    5. Sémirat, S. & Forges, F., 2021. "Strategic information transmission with sender's approval: the single-crossing case," Working Papers 2021-03, Grenoble Applied Economics Laboratory (GAEL).
    6. Bester, Helmut & Strausz, Roland, 2001. "Contracting with Imperfect Commitment and the Revelation Principle: The Single Agent Case," Econometrica, Econometric Society, vol. 69(4), pages 1077-1098, July.
    7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    8. Steven A. Matthews, 1989. "Veto Threats: Rhetoric in a Bargaining Game," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(2), pages 347-369.
    9. Stéphan Sémirat & Françoise Forges, 2021. "Strategic information transmission with sender’s approval: the single crossing case," Working Papers hal-03231673, HAL.
    10. Frug, Alexander, 2016. "A note on optimal cheap talk equilibria in a discrete state space," Games and Economic Behavior, Elsevier, vol. 99(C), pages 180-185.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Discrete cheap talk; Participation constraints; Single-crossing;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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