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Verifiability and neologism-proofness in a Sender-Receiver game

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  • Ryan, Matthew
  • Vaithianathan, Rhema

Abstract

This paper contributes to the literature on information transmission in Sender-Receiver games. We compare cheap-talk games to games with verifiable messages (persuasion games). We consider equilibria in which the Sender's private information (type) is fully revealed to the Receiver. We show that if a fully revealing perfect Bayesian equilibrium (PBE) exists when talk is cheap, then one also exists when messages are verifiable. We also show that this is not the case for neologism-proof PBE's. We construct an example in which full revelation can be sustained as a neologism-proof PBE outcome when talk is cheap, but not when messages are verifiable.

Suggested Citation

  • Ryan, Matthew & Vaithianathan, Rhema, 2011. "Verifiability and neologism-proofness in a Sender-Receiver game," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 256-262, August.
    • Handle: RePEc:eee:jeborg:v:79:y:2011:i:3:p:256-262
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    References listed on IDEAS

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    1. Giovannoni, Francesco & Seidmann, Daniel J., 2007. "Secrecy, two-sided bias and the value of evidence," Games and Economic Behavior, Elsevier, vol. 59(2), pages 296-315, May.
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    3. Farrell Joseph, 1993. "Meaning and Credibility in Cheap-Talk Games," Games and Economic Behavior, Elsevier, vol. 5(4), pages 514-531, October.
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    5. Mathis, Jérôme, 2008. "Full revelation of information in Sender-Receiver games of persuasion," Journal of Economic Theory, Elsevier, vol. 143(1), pages 571-584, November.
    6. Daniel J. Seidmann & Eyal Winter, 1997. "Strategic Information Transmission with Verifiable Messages," Econometrica, Econometric Society, vol. 65(1), pages 163-170, January.
    7. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    8. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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