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A note on optimal cheap talk equilibria in a discrete state space

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  • Frug, Alexander

Abstract

A discrete version of Crawford and Sobel's (1982) cheap talk model is considered. Unlike in the continuous case, limiting attention to partitional equilibria is with loss of generality. The need to consider equilibria that are non-partitional complicates the analysis. It is shown that if utility functions are concave and the sender is upwardly biased, then the receiver's optimal equilibrium is necessarily partitional. Based on this result, a simple characterization of the optimal equilibrium for the discrete uniform quadratic case is proposed.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:gamebe:v:99:y:2016:i:c:p:180-185
    DOI: 10.1016/j.geb.2016.08.004
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    References listed on IDEAS

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    Cited by:

    1. Stéphan Sémirat & Françoise Forges, 2021. "Strategic information transmission with sender’s approval: the single crossing case," Working Papers hal-03231673, HAL.
    2. Frug, Alexander, 2018. "Strategic gradual learning and information transmission," Journal of Economic Theory, Elsevier, vol. 177(C), pages 594-615.
    3. 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).
    4. Stéphan Sémirat & Françoise Forges, 2022. "Strategic information transmission with sender’s approval: the single crossing case," Post-Print hal-03231673, HAL.
    5. 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.
    6. Daniele Condorelli & Massimiliano Furlan, 2023. "Cheap Talking Algorithms," Papers 2310.07867, arXiv.org, revised Oct 2024.

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    More about this item

    Keywords

    Discrete cheap talk; Partitional equilibria;

    JEL classification:

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

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