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Toxic Types and Infectious Communication Breakdown

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Listed:
  • Kfir Eliaz
  • Alexander Frug

Abstract

We introduce a new channel for breakdown of cheap talk communication between an informed sender and an uninformed receiver. Our framework has the following novel feature: conditional on interacting, both parties agree on the optimal action in each state, but there are sender types with which the receiver prefers not to interact. We show that for a broad class of preferences, any interval equilibrium induces only finitely many actions in the support of the receiver's strategy. We also show that introducing a second stage with noisy signals on the sender type has a dramatic effect on the first-stage communication.

Suggested Citation

  • Kfir Eliaz & Alexander Frug, 2020. "Toxic Types and Infectious Communication Breakdown," Working Papers 1224, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1224
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    References listed on IDEAS

    as
    1. Drew Fudenberg & David K. Levine, 2008. "Reputation And Equilibrium Selection In Games With A Patient Player," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 7, pages 123-142, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    cheap talk; Contagion;

    JEL classification:

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

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