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The art of brevity

Alonso, Ricardo and Rantakari, Heikki (2022) The art of brevity. Journal of Economic Behavior and Organization, 195. 257 - 271. ISSN 0167-2681

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Identification Number: 10.1016/j.jebo.2022.01.014

Abstract

We analyze a class of sender-receiver games with quadratic payoffs, which includes the communication games in Alonso et al. (2008) and Rantakari (2008) as special cases, for which the sender's or the receiver's maximum expected payoff when players have access to arbitrary, mediated communication protocols is attained in one round of face-to-face, unmediated cheap talk. This result is based on the existence for these games of a communication equilibrium with an infinite number of partitions of the state space. We provide explicit expressions for the maximum expected payoff of the sender and the receiver, and illustrate its use by deriving new comparative statics of the quality of optimal communication. For instance, a shift in the underlying uncertainty that reduces expected conflict can worsen the quality of communication.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/journal-of-e...
Additional Information: © 2022 The Author(s).
Divisions: Management
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 > D7 - Analysis of Collective Decision-Making > D70 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited: 10 Feb 2022 13:24
Last Modified: 27 May 2022 13:12
URI: http://eprints.lse.ac.uk/id/eprint/113709

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