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Information-Revelation and Coordination Using Cheap Talk in a Game with Two-Sided Private Information

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Abstract

We consider a Bayesian game, namely the Battle of the Sexes with private information, in which each player has two types, High and Low. We allow cheap talk regarding players types before the game and prove that the unique fully revealing symmetric cheap talk equilibrium exists for a low range of prior probability of the High-type. This equilibrium has a desirable type-coordination property: it fully coordinates on the ex-post efficient pure Nash equilibrium when the players types are different. Type-coordination is also obtained in a partially revealing equilibrium in which only the High-type is not truthful, for a medium range of prior probability of the High-type.

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  • Ganguly, Chirantan & Ray, Indrajit, 2015. "Information-Revelation and Coordination Using Cheap Talk in a Game with Two-Sided Private Information," Cardiff Economics Working Papers E2015/7, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2015/7
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    Cited by:

    1. Antonio Cabrales & Michalis Drouvelis & Zeynep Gurguy & Indrajit Ray, 2017. "Transparency is Overrated: Communicating in a Coordination Game with Private Information," CESifo Working Paper Series 6781, CESifo.
    2. Zhuozheng Li & Huanxing Yang & Lan Zhang, 2019. "Pre-communication in a coordination game with incomplete information," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 109-141, March.
    3. Cabrales, Antonio & Drouvelis, Michalis & Gurguc, Zeynep & Ray, Indrajit, 2018. "Do we need to listen to all stakeholders?: communicating in a coordination game with private information," Cardiff Economics Working Papers E2018/23, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    Keywords

    Battle of the Sexes; Private Information; Cheap Talk; Coordination; Full Revelation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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