CEU Electronic Theses and Dissertations, 2008
Author | McLean, Aliz |
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Title | A Cheap Talk Game with Multiple Audiences |
Summary | In this thesis I extend and develop a cheap talk game based on Farrell and Gibbons (1989) with one informed agent (a Sender) and two audiences (Receivers), with whom the Sender may communicate together in public or separately in private. I develop a model where the Sender has three possible types, describe the pure strategy perfect Bayesian equilibria in private and public communication, and find that, as opposed to the model of Farrell and Gibbons (1989), there exist cases where information can flow between the Sender and the Receivers in private, but no communication is credible in public. This scenario is named Mutual Subversion. I conduct a welfare analysis of the possible equilibria and conclude that while in private more informative equilibria are preferred by all players, this is no longer true in public. I apply an equilibrium refinement criterion, neologism-proofness (Farrell 1993) to the multiple available equilibria, and it turns out that sometimes no equilibrium satisfies the criterion. I then add a forum choice stage, made by the Sender and possibly contingent on his type, to the game and describe cases where the Sender can achieve superior payoffs by being able to choose the forum of communication himself. I examine forum choice equilibria from the point of view of neologism-proofness, and present a new type of equilibrium refinement which takes into account the forum in which a neologism is used. Finally, I present two further extensions to the model which provide further insights, one where the Sender has k > 3 possible types and one where there are three audiences. |
Supervisor | Vida, Peter |
Department | Economics MA |
Full text | https://www.etd.ceu.edu/2008/mclean_aliz.pdf |
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