Dynamic Strategic Information Transmission

This paper studies strategic information transmission in a dynamic environment where, each period, a privately informed expert sends a message and a decision maker takes an action. Our main result is that, in contrast to a static environment, full information revelation is possible. The gradual revelation of information and the eventual full revelation is supported by the dynamic rewards and punishments. The construction of a fully revealing equilibrium relies on two key features. The first feature is that the expert is incentivized, via appropriate actions, to join separable groups in which she initially pools with far-away types, then later reveals her type. The second feature is the use of trigger strategies. The decision maker is incentivized by the reward of further information revelation if he chooses the separation-inducing actions, and the threat of a stop in information release if he does not. Our equilibrium is non-monotonic. With monotonic partition equilibria, full revelation is impossible.

[1]  Bart Taub,et al.  Dynamic Agency with Feedback , 1997 .

[2]  A. Ambrus,et al.  Multi-sender cheap talk with restricted state spaces , 2008 .

[3]  P. Sørensen,et al.  Reputational cheap talk , 2006 .

[4]  S. Baliga,et al.  The Strategy of Manipulating Conflict , 2012 .

[5]  Joel Sobel,et al.  Signaling Games , 2009, Encyclopedia of Complexity and Systems Science.

[6]  Kohei Kawamura,et al.  Noisy Talk ∗ , 2007 .

[7]  Ivanov Maxim,et al.  Dynamic Information Revelation in Cheap Talk , 2015 .

[8]  S. Athey,et al.  Collusion With Persistent Cost Shocks , 2008 .

[9]  J. Morgan,et al.  A Model of Expertise , 1999 .

[10]  Vijay Krishna,et al.  The art of conversation: eliciting information from experts through multi-stage communication , 2004, J. Econ. Theory.

[11]  S. Baliga,et al.  Arms Races and Negotiations , 2002 .

[12]  Marco Battaglini,et al.  Multiple Referrals and Multidimensional Cheap Talk , 2002 .

[13]  Gregory Pavlov,et al.  How to talk to multiple audiences , 2011, Games Econ. Behav..

[14]  Robert E. Filman,et al.  Professional advice ∗ , 2004 .

[15]  Péter Eso,et al.  Wait and See , 2008 .

[16]  D. Bergemann,et al.  DYNAMIC AUCTIONS , 2010 .

[17]  Gregory Pavlov,et al.  Mediation, arbitration and negotiation , 2009, J. Econ. Theory.

[18]  Françoise Forges,et al.  Multistage Communication with and without Verifiable Types , 2008, IGTR.

[19]  J. Sobel,et al.  Selecting Cheap‐Talk Equilibria , 2008 .

[20]  D. Martimort,et al.  Multidimensional communication mechanisms: cooperative and conflicting designs , 2008 .

[21]  Nicolas Vieille,et al.  Dynamic Sender-Receiver Games , 2012, J. Econ. Theory.

[22]  Maxim Ivanov.  Dynamic Informational Control , 2011 .

[23]  Jérôme Renault,et al.  Repeated Games with Incomplete Information , 2009, Encyclopedia of Complexity and Systems Science.

[24]  Marco Ottaviani,et al.  Professional advice ∗ , 2003 .

[25]  J. Morgan,et al.  The Art of Conversation , 2002 .

[26]  Phillip C. Stocken,et al.  An Analysis of Stock Recommendations , 1998 .

[27]  Navin Kartik,et al.  Credulity, Lies, and Costly Talk , 2007, J. Econ. Theory.

[28]  Gilat Levy,et al.  On the Limits of Communication in Multidimensional Cheap Talk: A Comment , 2004 .

[29]  Françoise Forges,et al.  Long Persuasion Games , 2006, J. Econ. Theory.

[30]  Robert J. Aumann,et al.  Repeated Games with Incomplete Information , 1995 .

[31]  Dynamic Mechanism Design: Revenue Equivalence, Prot Maximization and Information Disclosure Preliminary and incomplete , 2008 .

[32]  T. Sjöström,et al.  Strategic Ambiguity and Arms Proliferation , 2006, Journal of Political Economy.

[33]  J. Sobel,et al.  STRATEGIC INFORMATION TRANSMISSION , 1982 .

[34]  Dino Gerardi,et al.  Communication and Learning , 2008 .

[35]  R. Gibbons,et al.  Cheap Talk with Two Audiences , 1989 .

[36]  J. Sobel.  A Theory of Credibility , 1985 .

[37]  Gilat Levy,et al.  It Takes Two: An Explanation of the Democratic Peace , 2003 .

[38]  Shih En Lu,et al.  Robust almost fully revealing equilibria in multi-sender cheap talk ∗ , 2010 .

[39]  Jérôme Mathis.  Full revelation of information in Sender-Receiver games of persuasion , 2008, J. Econ. Theory.

[40]  S. Hart,et al.  Long Cheap Talk , 2003 .

[41]  Ilya Segal,et al.  An Efficient Dynamic Mechanism , 2013 .