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Disagreement and evidence production in strategic information transmission

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  • Péter Eső
  • Ádám Galambos

Abstract

We expand Crawford and Sobel’s (Econometrica 50(6):1431–1451, 1982 ) model of information transmission to allow for the costly provision of ‘hard evidence’ in addition to conventional cheap talk. Under mild assumptions we prove that equilibria have an interval-partition structure, where types of the Sender belonging to the same interval either all induce the same action through cheap talk or reveal their types through hard evidence. We also show that the availability of costly hard signals may reverse one of the important implications of the classical cheap talk model, namely, that diverging preferences always lead to less communication. Copyright Springer-Verlag 2013

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  • Péter Eső & Ádám Galambos, 2013. "Disagreement and evidence production in strategic information transmission," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(1), pages 263-282, February.
    • Handle: RePEc:spr:jogath:v:42:y:2013:i:1:p:263-282
    DOI: 10.1007/s00182-012-0344-8
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    References listed on IDEAS

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    Cited by:

    1. Mike Felgenhauer, 2019. "Endogenous Persuasion with Costly Verification," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1054-1087, July.
    2. Schopohl, Simon, 2019. "Full revelation under optional verification," Economics Letters, Elsevier, vol. 176(C), pages 14-16.
    3. Omar A. Nayeem, 2017. "Bend Them but Don't Break Them: Passionate Workers, Skeptical Managers, and Decision Making in Organizations," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 100-125, August.
    4. Winand Emons & Claude Fluet, 2019. "Strategic communication with reporting costs," Theory and Decision, Springer, vol. 87(3), pages 341-363, October.

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