Slightly Biased Communication
32 Pages Posted: 3 Jul 2016
Date Written: June 20, 2016
This paper analyzes strategic information transmission between a sender and a receiver when their conflict of interest is small. In this instance, communication is precise: each message communicates a small mass of states of the world. Equilibrium strategies can be approximated by simple differential equations which allow a neat visualization of how the payoff structure shapes communication. In particular, we characterize how the distribution of states influences the precision of the information transmission, the effect of limiting the set of available messages, and which changes in the (state-dependent) bias improve communication.
Keywords: Strategic Communication, Small Bias
JEL Classification: C72, D82, D83
Suggested Citation: Suggested Citation