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Beneficial mediated communication in cheap talk

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  • Ivanov, Maxim

Abstract

This paper investigates mediated communication between an informed sender and an uninformed receiver with conflicting preferences in the framework of Crawford and Sobel (1982). It provides a simple condition for mediation to be beneficial, that is, to give the receiver a higher ex-ante payoff than the uninformed decision. This condition in turn allows us to identify scenarios in which mediation is beneficial while all cheap-talk equilibria are uninformative. Our condition extends the conditions for beneficial mediation with a binary type space (Mitusch and Strausz, 2005) and mediation via a biased mediator (Ambrus et al., 2013). Finally, we show the connection between the identified condition and related conditions in other conflict resolution schemes: delegation (Alonso and Matouschek, 2008) and arbitration (Kovác and Mylovanov, 2009).

Suggested Citation

  • Ivanov, Maxim, 2014. "Beneficial mediated communication in cheap talk," Journal of Mathematical Economics, Elsevier, vol. 55(C), pages 129-135.
    • Handle: RePEc:eee:mateco:v:55:y:2014:i:c:p:129-135
    DOI: 10.1016/j.jmateco.2014.09.004
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    References listed on IDEAS

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    1. , & ,, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
    2. , & , J. & ,, 2007. "Noisy talk," Theoretical Economics, Econometric Society, vol. 2(4), December.
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    4. Ricardo Alonso & Niko Matouschek, 2008. "Optimal Delegation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(1), pages 259-293.
    5. Kay Mitusch & Roland Strausz, 2005. "Mediation in Situations of Conflict and Limited Commitment," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(2), pages 467-500, October.
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    7. Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
    8. Krishna, Vijay & Morgan, John, 2004. "The art of conversation: eliciting information from experts through multi-stage communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 147-179, August.
    9. Ivanov, Maxim, 2010. "Communication via a strategic mediator," Journal of Economic Theory, Elsevier, vol. 145(2), pages 869-884, March.
    10. Nicola Persico, 2000. "Information Acquisition in Auctions," Econometrica, Econometric Society, vol. 68(1), pages 135-148, January.
    11. , & , M. & ,, 2013. "Hierarchical cheap talk," Theoretical Economics, Econometric Society, vol. 8(1), January.
    12. Krishna, Vijay, 2001. "Asymmetric Information and Legislative Rules: Some Amendments," American Political Science Review, Cambridge University Press, vol. 95(2), pages 435-452, June.
    13. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    Cited by:

    1. Alonso, Ricardo & Rantakari, Heikki, 2022. "The art of brevity," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 257-271.

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