The art of brevity

Alonso, Ricardo and Rantakari, Heikki (2014) The art of brevity. USC Marshall School of Business Research Paper Series. University of Southern California, Marshall School of Business, Los Angeles, CA, USA.

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Abstract

We analyze a class of sender-receiver games with quadratic payoffs, which includes the communication games in Alonso, Dessein and Matouschek (2008) and Rantakari (2008) as special cases, for which 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 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:	Monograph (Discussion Paper)
Official URL:	http://www.marshall.usc.edu/
Additional Information:	© 2014 The Authors, USC Marshall School of Business
Divisions:	Management
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management H Social Sciences > HE Transportation and Communications Q Science > QA Mathematics
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:	05 Aug 2014 15:59
Last Modified:	15 Sep 2023 23:32
URI:	http://eprints.lse.ac.uk/id/eprint/58681

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