Dynamic Communication with Biased Senders

18 Pages Posted: 22 Aug 2017

See all articles by Chiara Margaria

Chiara Margaria

Boston University

Alex Smolin

University of Toulouse 1 - Toulouse School of Economics (TSE)

Date Written: August 18, 2017

Abstract

We study dynamic games in which senders with state-independent payoffs communicate to a single receiver. Senders’ private information evolves according to an aperiodic and irreducible Markov chain. We prove an analog of a folk theorem — that any feasible and individually rational payoff can be approximated in a perfect Bayesian equilibrium if players are sufficiently patient. In particular, there are equilibria in which the receiver makes perfectly informed decisions in almost every period, even if no informative communication can be sustained in the stage game. We conclude that repeated interaction can overcome strategic limits of communication.

Keywords: Bayesian Games, Repeated Games, Communication, Folk Theorem

JEL Classification: C72, C73, D82, D83

Suggested Citation

Margaria, Chiara and Smolin, Alex, Dynamic Communication with Biased Senders (August 18, 2017). Available at SSRN: https://ssrn.com/abstract=3022395 or http://dx.doi.org/10.2139/ssrn.3022395

Chiara Margaria

Boston University ( email )

270 Bay State Rd
Boston, MA 02215
United States

Alex Smolin (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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