Dynamic Strategic Information Transmission

49 Pages Posted: 1 Jun 2011 Last revised: 16 Jun 2011

See all articles by Mikhail Golosov

Mikhail Golosov

Princeton University - Department of Economics

Vasiliki Skreta

University of Texas at Austin - Department of Economics; University College London

Aleh Tsyvinski

Yale University; Yale University - Cowles Foundation

Andrea Wilson

affiliation not provided to SSRN

Multiple version iconThere are 3 versions of this paper

Date Written: June 14, 2011

Abstract

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.

Keywords: asymmetric information,cheap talk, dynamic strategic communication, full information revelation

JEL Classification: D82, D83

Suggested Citation

Golosov, Mikhail and Skreta, Vasiliki and Tsyvinski, Aleh and Tsyvinski, Aleh and Wilson, Andrea, Dynamic Strategic Information Transmission (June 14, 2011). Cowles Foundation Discussion Paper No. 1802, Available at SSRN: https://ssrn.com/abstract=1846527 or http://dx.doi.org/10.2139/ssrn.1846527

Mikhail Golosov

Princeton University - Department of Economics ( email )

111 Fisher Hall
Princeton, NJ 08544-1021
United States

Vasiliki Skreta

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

HOME PAGE: http://vskreta.wixsite.com/vskreta

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

HOME PAGE: http://vskreta.wixsite.com/vskreta

Aleh Tsyvinski (Contact Author)

Yale University - Cowles Foundation ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-9163 (Phone)

Yale University ( email )

New Haven, CT 06520
United States

Andrea Wilson

affiliation not provided to SSRN ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
66
Abstract Views
742
rank
153,922
PlumX Metrics