Distorted Voronoi Languages

Posted: 20 Mar 2012

See all articles by Manuel Foerster

Manuel Foerster

University of Hamburg - Department of Economics

Frank Riedel

Bielefeld University - Center for Mathematical Economics

Date Written: March 19, 2012

Abstract

In a recent paper, Jäger, Metzger, and Riedel (2011) study communication games of common interest when signals are simple and types complex. They characterize strict Nash equilibria as so-called Voronoi languages that consist of Voronoi tesselations of the type set and Bayesian estimators on the side of receivers. In this note, we introduce conflicts of interest in the same setting. We characterize strict Nash equilibria as distorted Voronoi languages that use all messages. For large conflicts, such informative equilibria need not exist. If the bias is sufficiently small, however, these equilibria do exist. This establishes the robustness of the results in Jäger, Metzger, and Riedel (2011) to biased interests. We finally give examples of strict Nash equilibria, one of them using simulations to illustrate an equilibrium with many messages and non-uniformly distributed types.

Keywords: Cheap Talk, Signaling Game, Communication Game, Voronoi tesselation, Conflict of Interest

JEL Classification: C72, D82, D83

Suggested Citation

Foerster, Manuel and Riedel, Frank, Distorted Voronoi Languages (March 19, 2012). Institute of Mathematical Economics Working Paper No. 458. Available at SSRN: https://ssrn.com/abstract=2026178

Manuel Foerster

University of Hamburg - Department of Economics ( email )

Von-Melle-Park 5
room 2128 C rise
Hamburg, 20146
Germany

Frank Riedel (Contact Author)

Bielefeld University - Center for Mathematical Economics ( email )

Postfach 10 01 31
Bielefeld, D-33501
Germany

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