The (Non-)Robustness of Influential Cheap Talk Equilibria When the Sender's Preferences are State-Independent

17 Pages Posted: 14 Jan 2014

See all articles by Christoph Diehl

Christoph Diehl

Bielefeld University

Christoph Kuzmics

University of Graz - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 13, 2014

Abstract

Chakraborty and Harbaugh (2010) prove the existence of influential cheap talk equilibria in one sender one receiver games when the state is multidimensional and the preferences of the sender are state-independent. We show that only the babbling equilibrium survives the introduction of any small degree of uncertainty about the sender’s preferences in the spirit of Harsanyi (1973). Introducing small costs of lying as in Kartik (2009), i.e. a small preference for sending the actual state as the message, while removing some influential equilibria, makes others robust to payoff uncertainty. Finally, modelling a small desire to be truthful endogenously, i.e. by taking into account how the receiver interprets the message, may make some influential equilibria robust, but may also remove all influential equilibria.

Keywords: cheap talk, communication, information transmission

JEL Classification: C72, D82, D83

Suggested Citation

Diehl, Christoph and Kuzmics, Christoph, The (Non-)Robustness of Influential Cheap Talk Equilibria When the Sender's Preferences are State-Independent (January 13, 2014). Available at SSRN: https://ssrn.com/abstract=2378311 or http://dx.doi.org/10.2139/ssrn.2378311

Christoph Diehl

Bielefeld University ( email )

Universitätsstraße 25
Bielefeld, 33615
Germany

Christoph Kuzmics (Contact Author)

University of Graz - Department of Economics ( email )

Universitaetsstrasse 15
RESOWI - F4
Graz, 8010
Austria

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