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Strategic interpretations

Eliaz, Kfir, Spiegler, Ran and Thysen, Heidi C. (2021) Strategic interpretations. Journal of Economic Theory, 192. ISSN 0022-0531

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Identification Number: 10.1016/j.jet.2021.105192

Abstract

We study strategic communication when the sender's multi-dimensional messages are given an interpretation by the sender himself or by a proxy. Interpreting messages involves the provision of some data about their statistical state-dependence. Interpretation can be selective: different kinds of data interpret different sets of message components. The receiver uses this data to decipher messages, yet he does not draw any inferences from the kind of data he is given. In this way, strategic interpretation of messages can influence the receiver's understanding of their equilibrium meaning. We show that in a two-action, two-state setting, the sender can attain his first-best payoff when the prior on one state exceeds a threshold that decays quickly with message dimensionality. We examine the result's robustness to the critique that our receiver does not attempt any inferences from selective interpretations.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/journal-of-e...
Additional Information: © 2021 Elsevier Inc
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited: 15 Feb 2021 09:03
Last Modified: 20 Sep 2021 03:20
URI: http://eprints.lse.ac.uk/id/eprint/108660

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