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Proximate preferences and almost full revelation in the Crawford–Sobel game

Author

Listed:
  • Murali Agastya

    (University of Sydney
    Indian Institute of Management Bangalore)

  • Parimal Kanti Bag

    (National University of Singapore)

  • Indranil Chakraborty

    (National University of Singapore)

Abstract

Crawford and Sobel (Econometrica 50(6):1431–1451, 1982) is a seminal contribution that introduced the study of costless signalling of privately held information by an expert to a decision maker. Among the chief reasons for its widespread application is the comparative statics they develop between the extent of strategically transmitted information and the degree of conflict in the two players’ preferences. This paper completes their analysis by establishing that in their general model, almost full revelation obtains as the two players’ preferences get arbitrarily close to each other.

Suggested Citation

  • Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2015. "Proximate preferences and almost full revelation in the Crawford–Sobel game," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 201-212, October.
    • Handle: RePEc:spr:etbull:v:3:y:2015:i:2:d:10.1007_s40505-014-0042-8
    DOI: 10.1007/s40505-014-0042-8
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    References listed on IDEAS

    as
    1. Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," The Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
    2. , & ,, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
    3. Spector, David, 2000. "Pure communication between agents with close preferences," Economics Letters, Elsevier, vol. 66(2), pages 171-178, February.
    4. Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2014. "Communication and authority with a partially informed expert," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 176-197, March.
    5. Roland Benabou & Guy Laroque, 1992. "Using Privileged Information to Manipulate Markets: Insiders, Gurus, and Credibility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 921-958.
    6. Morgan, John & Stocken, Phillip C, 2003. "An Analysis of Stock Recommendations," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 183-203, Spring.
    7. Krishna, Vijay, 2001. "Asymmetric Information and Legislative Rules: Some Amendments," American Political Science Review, Cambridge University Press, vol. 95(2), pages 435-452, June.
    8. 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. Blume, Andreas & Deimen, Inga & Inoue, Sean, 2022. "Incomplete contracts versus communication," Journal of Economic Theory, Elsevier, vol. 205(C).
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    3. Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2014. "Communication and authority with a partially informed expert," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 176-197, March.
    4. Aurora García-Gallego & Penélope Hernández-Rojas & Amalia Rodrigo-González, 2019. "Efficient coordination in the lab," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 14(1), pages 175-201, March.

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    More about this item

    Keywords

    Cheap talk; Strategic information transmission; Bias; Convergence; Full revelation;
    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
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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