Difference between revisions of "Battaglini, M. (2002), Multiple Referrals and Multidimensional Cheap Talk"

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(New page: [http://www.edegan.com/pdfs/Battaglini%20(2002)%20-%20Multiple%20Referrals%20and%20Multidimensional%20Cheap%20Talk.pdf pdf of paper])
imported>Bo
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[http://www.edegan.com/pdfs/Battaglini%20(2002)%20-%20Multiple%20Referrals%20and%20Multidimensional%20Cheap%20Talk.pdf pdf of paper]
 
[http://www.edegan.com/pdfs/Battaglini%20(2002)%20-%20Multiple%20Referrals%20and%20Multidimensional%20Cheap%20Talk.pdf pdf of paper]
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==Abstract==
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In previous work on  cheap  talk, uncertainty has  almost  always been  modeled  using  a  single-dimensional  state  variable.  In  this  paper we  prove  that  the  dimensionality  of  the uncertain  variable  has  an  important  qualitative impact  on  results  and  yields  interesting insights into the  "mechanics" of information transmission. Contrary to  the unidimensional case, if there is more than one  sender, full revelation of information in all states of nature is  generically possible,  even  when  the  conflict  of  interest is  arbitrarily large. What really matters in transmission of information is the local behavior of  senders' indifference curves at the ideal point of  the  receiver, not  the proximity of  players' ideal point.

Revision as of 17:21, 7 October 2011

pdf of paper

Abstract

In previous work on cheap talk, uncertainty has almost always been modeled using a single-dimensional state variable. In this paper we prove that the dimensionality of the uncertain variable has an important qualitative impact on results and yields interesting insights into the "mechanics" of information transmission. Contrary to the unidimensional case, if there is more than one sender, full revelation of information in all states of nature is generically possible, even when the conflict of interest is arbitrarily large. What really matters in transmission of information is the local behavior of senders' indifference curves at the ideal point of the receiver, not the proximity of players' ideal point.