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

34 Pages Posted: 18 Feb 2015

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: December 17, 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 perform two robustness checks of this result. First, we show that only the babbling equilibrium survives the introduction of any small degree of Harsanyi-Uncertainty, i.e. uncertainty about the sender's preferences in the spirit of Harsanyi (1973). Second, we show that adding a small degree of state dependence in the sender's preferences removes all influential hyperplane equilibria provided the state dependence satisfies a generic property (of essentially not being of a linear or quadratic form) and removes all influential equilibria in many games. If such a game has an influential equilibrium it is likely robust to at least some kind of Harsanyi-Uncertainty.

Keywords: cheap talk, communication, information transmission, robustness

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 (December 17, 2014). Available at SSRN: https://ssrn.com/abstract=2566247 or http://dx.doi.org/10.2139/ssrn.2566247

Christoph Diehl

Bielefeld University ( email )

Universit├Ątsstra├če 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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