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Modes of ambiguous communication

Modes of ambiguous communication
Modes of ambiguous communication
We study cheap talk communication in a simple two actions-two states model featuring an ambiguous state distribution. Equilibrium behavior of both sender (S) and receiver (R) features mixing and we relate each agent's randomization to a specific mode of ambiguous communication. For sufficiently high ambiguity, implementing the S-optimal decision rule with only two messages is impossible if R has aligned preferences. This may in contrast be possible if R has misaligned preferences. Adding a little ambiguity may generate influential communication that is unambiguously advantageous to S.
0899-8256
271-292
Kellner, Christian
4e2ed069-76c7-4084-a353-f56ee03e2094
Le Quement, Mark T.
db3377aa-f132-410d-bde1-bcaa8c5d1f72
Kellner, Christian
4e2ed069-76c7-4084-a353-f56ee03e2094
Le Quement, Mark T.
db3377aa-f132-410d-bde1-bcaa8c5d1f72

Kellner, Christian and Le Quement, Mark T. (2017) Modes of ambiguous communication. Games and Economic Behavior, 104, 271-292. (doi:10.1016/j.geb.2017.03.010).

Record type: Article

Abstract

We study cheap talk communication in a simple two actions-two states model featuring an ambiguous state distribution. Equilibrium behavior of both sender (S) and receiver (R) features mixing and we relate each agent's randomization to a specific mode of ambiguous communication. For sufficiently high ambiguity, implementing the S-optimal decision rule with only two messages is impossible if R has aligned preferences. This may in contrast be possible if R has misaligned preferences. Adding a little ambiguity may generate influential communication that is unambiguously advantageous to S.

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Accepted/In Press date: 31 March 2017
e-pub ahead of print date: 28 April 2017
Published date: July 2017
Organisations: Economics

Identifiers

Local EPrints ID: 410711
URI: http://eprints.soton.ac.uk/id/eprint/410711
DOI: doi:10.1016/j.geb.2017.03.010
ISSN: 0899-8256
PURE UUID: fa544f32-68f2-421b-951c-8dbdcf1fccae
ORCID for Christian Kellner: ORCID iD orcid.org/0000-0003-3855-5418

Catalogue record

Date deposited: 09 Jun 2017 09:24
Last modified: 16 Mar 2024 05:16

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Contributors

Author: Christian Kellner ORCID iD
Author: Mark T. Le Quement

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