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Information revelation and coordination using cheap talk in a game with two-sided private information

Ganguly, C. and Ray, Indrajit 2017. Information revelation and coordination using cheap talk in a game with two-sided private information. [Discussion Paper]. Discussion Paper Series, CRETA, Department of Economics, vol. 35. Coventry: University of Warwick..

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Abstract

We consider a Bayesian game, namely the Battle of the Sexes with private information, in which each player has two types, High and Low. We allow cheap talk regarding playersítypes before the game. We prove that the unique fully revealing symmetric cheap talk equilibrium exists (for a low range of prior probability of the High-type) and has a desirable type-coordination property: it fully coordinates on the ex-post e¢ cient pure Nash equilibrium when the playersí types are di§erent. Type-coordination is also obtained in a partially revealing equilibrium in which only the High-type is not truthful, for a medium range of prior probability of the High-type. We also prove that there is no (non-babbling) truthful cheap talk equilibrium if only one player talks.

Item Type: Monograph (Discussion Paper)
Date Type: Publication
Status: Unpublished
Schools: Business (Including Economics)
Subjects: H Social Sciences > HB Economic Theory
Publisher: University of Warwick.
Date of First Compliant Deposit: 9 August 2017
Last Modified: 23 Aug 2017 13:27
URI: http://orca.cardiff.ac.uk/id/eprint/103346

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