Communication and Bargaining in the Spatial Model

This paper studies collective choice by participants possessing private information about the consequences of policy decisions in policymaking institutions that involve cheap-talk communication and bargaining. The main result establishes a connection between the extent to which problems of this type posses fully-revealing equilibria that select policies in the full information majority rule core (when it is well-defined) and the extent to which a fictitious sender-receiver game possesses a fully revealing equilibria. This result allows us to extend Banks and Duggan's (2000) core equivalence results to the case of noisy policymaking environments with private information when some combination of nonexclusivity and preference alignment conditions are satisfied.

Multi-sender cheap talk with restricted state spaces

This paper analyzes multi-sender cheap talk when the state space might be restricted, either because the policy space is restricted, or the set of rationalizable policies of the receiver is not the whole space. We provide a necessary and sufficient condition for the existence of a fully revealing perfect Bayesian equilibrium for any state space. We show that if biases are large enough and are not of similar directions, where the notion of similarity depends on the shape of the state space, then there is no fully revealing perfect Bayesian equilibrium. The results suggest that boundedness, as opposed to dimensionality, of the state space plays an important role in determining the qualitative implications of a cheap talk model. We also investigate equilibria that satisfy a robustness property, diagonal continuity.Cheap talk, two senders, multidimensional state space

Constrained Communication with Multiple Agents: Anonymity, Equal Treatment, and Public Good Provision

This paper studies information transmission subject to anonymity requirements and communication in public good provision without transfers. The structure of informative equilibria under anonymity or in public good provision can di¤er substantially from that of direct one-to-one communication, and in particular we distinguish i) informational distortion caused by the intrinsic divergence of preferences between the decision maker and each agent; and ii) informational distortion caused by the decision maker's weak response to each agent's message due to the equal treatment of all agents that results from anonymity or the nature of public goods. We examine the interaction between these two types of distortion and demonstrate that they may partly offset one another. Information transmission and welfare can be enhanced by introducing the second type of distortion through anonymity when the first type of distortion is severe. In public good provision where the intrinsic preference divergence between the utilitarian decision maker and each agent is absent, as the number of agents becomes larger the quality of communication diminishes and informative equilibria converge to the one that can be played by letting each agent report a binary message (e.g. "yes" or "no") even if their preferences and the decision are continuous.Cheap Talk, Anonymous Communication, Equal Treatment, Public Good Provision.

Multidimentional Cheap Talk

In this paper, we extend the cheap talk model of Crawford and Sobel (1982) to a multidimensional state space. We provide a characterization of informative equilibria. Most importantly, we prove for a generic family of distribution functions, that no information transmission is feasible when the conflict between the sender and the receiver is too large. Thus, adding more dimensions cannot improve upon information revelation when interests are too divergentCheap Talk

Multi-Sender Cheap Talk with Restricted State Spaces

This paper analyzes multi-sender cheap talk when the state space might be restricted, either because the policy space is restricted, or the set of rationalizable policies of the receiver is not the whole space. We provide a necessary and sufficient condition for the existence of a fully revealing perfect Bayesian equilibrium for any state space. We show that if biases are large enough and are not of similar directions, where the notion of similarity depends on the shape of the state space, then there is no fully revealing perfect Bayesian equilibrium. The results suggest that boundedness, as opposed to dimensionality, of the state space plays an important role in determining the qualitative implications of a cheap talk model. We also investigate equilibria that satisfy a robustness property, diagonal continuity.Economic

Inequality, Happiness and Relative Concerns: What Actually is their Relationship?

This paper studies information transmission between multiple agents with different preferences and a welfare maximizing decision maker who chooses the quality or quantity of a public good (e.g. provision of public health service; carbon emissions policy; pace of lectures in a classroom) that is consumed by all of them. Communication in such circumstances su¤ers from the agents. incentive to "exaggerate" their preferences relative to the average of the other agents, since the decision maker's reaction to each agent's message is weaker than in one-to-one communication. As the number of agents becomes larger the quality of information transmission diminishes. The use of binary messages (e.g. "yes" or "no") is shown to be a robust mode of communication when the main source of informational distortion is exaggeration.: Communication, Public Good Provision, Cheap Talk, Committee, Non-binding Referendum

Accountability and Cheap Talk

This paper analyzes a cheap talk model with heterogeneous receivers who are accountable for the correctness of their actions, showing that there exists a truth-revealing equilibrium. This sheds new light on the important role played by elections in shaping politicians' and, more surprisingly, advisor's behaviors in a cheap-talk setting. In deciding which message to send, the advisor is aware that he could use this message to affect the electoral outcome, the manipulation effect, or to shape the first period policy, the influence effect. When the first effect dominates the second there exists an informative equilibrium. In addition, I show that the presence of heterogeneous politicians leads to an increase in voters' welfare as a result of better-informed decisions. I allow the politician to delegate authority to the expert, showing that due to the signaling value of the politician's delegation decision, only corrupt or incompetent incumbents will delegate the second-period decision. Finally, I generalize the results in a number of different directions.cheap talk, corruption, reputation, ideology.

Essays on Information Economics

This thesis consists of three essays on information economics. I explore how information is strategically communicated or designed by senders who aim to influence the decisions of a receiver. In the first chapter, I study a cheap talk game between two imperfectly informed experts and a decision maker. The experts receive noisy signals about the state and sequentially communicate the relevant information to the decision maker. I refine the self-serving belief system under uncertainty and Ι characterise the most informative equilibrium that might arise in such environments.In the second chapter, I consider the case where a decision maker seeks advice from a biased expert who cares also about establishing a reputation of being competent. The expert has the incentives to misreport her information but she faces a trade-off between the gain from misrepresentation and the potential reputation loss. I show that the equilibrium is fully-revealing if the expert is not too biased and not too highly reputable. If there is competition between two experts the information transmission is always improved. However, in cases where the experts are more than two the result is ambiguous, and it depends on the players’ prior belief over states.In the last chapter, I consider a model of strategic communication where a privately and imperfectly informed sender can persuade a receiver. The sender may receive favorable or unfavorable private information about her preferred state. I describe two ways that are adopted in real life situations and theoretically improve equilibrium informativeness given sender's private information. First, a policy that suggests symmetry constraints to the experiments' choice. Second, an approval strategy characterised by a low precision threshold where the receiver will accept the sender with a positive probability and a higher one where the sender will be accepted with certainty

Strategic Communication Games: Theory and Applications

The dissertation consists of the three essays about strategic communication games. Strategic communication games are costless sender-receiver games, and address the question of how much information can be credibly transmitted in equilibrium, and what kind of communication environments facilitate information transmission. Ch. 2, “Multidimensional Cheap Talk with Sequential Messages,” considers a multidimensional cheap talk game where there are two senders who share the private information, and send a message to the receiver sequentially. We suggest a notion of extended self-serving belief, and show that there exists a fully revealing equilibrium if and only if the senders have opposing-biased preferences. Ch. 3, “A Characterization of Equilibrium Set of Persuasion Games without Single Crossing Conditions,” considers a persuasion game between one sender and one receiver. The sender is a perfectly informed player, and any private information is completely verifiable. The receiver has binary alternatives. However, because the players\u27 preferences do not satisfy the Giovannoni-Seidmann single crossing condition, full disclosure equilibrium never exists. We characterize the set of equilibria by specifying the receiver\u27s ex ante expected utility. When mass media strategically suppress election-relevant information in order to influence public opinion, how do candidates and voters react to this media manipulation? To answer this question, Ch. 4, “Manipulated News: Electoral Competition and Mass Media,” studies a Downsian voting model including media outlets. The two candidates simultaneously announce policies, but only the media outlets observe them; the voter cannot observe. Then before voting occurs, the media outlets send news about the policies. After reading the news, the voter chooses one of the candidates. In the model with single outlet, equilibrium outcomes are distorted via the distortions in the voter\u27s and the candidates\u27 behaviors. As a result, the median voter theorem could fail

Essays on strategic communication

This thesis consists of three essays on strategic communication. It deals with the motivations behind experts’ incentives to transmit information to decision-makers. Large organizations, such as governments and global corporations, rely on expertise associated with multiple areas of knowledge. The necessary information is thus provided by many individuals or subunits who, in turn, may be interested in influencing decisions. Chapter 1 studies the interaction between a decision-maker who needs to take action on correlated issues, and experts who can communicate through costless, non-verifiable messages. Credible communication depends on how information relevant to one decision affects other decisions. The paper shows that a specialized expert can be trusted more than an expert whose knowledge extends to multiple areas. Even if the latter advises on a single discipline, information from other areas of knowledge may favour his interests, increasing his incentives to be dishonest. Chapter 2 expands this framework by introducing the strategic allocation of authority and the acquisition of information. The correlation between decisions affects the extent of the informational gains from delegation in three significant ways. First, there is a commitment value of delegation: giving up control over a controversial decision can motivate experts to transmit information relevant to less controversial decisions. Secondly, delegation hampers incentives to acquire information because it restricts the expected ‘marginal return’ of being informed. Lastly, restricting an expert’s access to information he is not expected to communicate enhances his credibility because it reduces incentives to be dishonest. Chapter 3 studies in more depth the relationship between authority and information acquisition. It focuses on how much costly information a biased expert acquires. It shows that experts with intermediate bias acquire more information under centralization than delegation when costs are sufficiently high. In such cases, the principal prefers to retain decision-making authority