Abstract
This paper studies strategic information transmission in a finite horizon environment where, each period, a privately informed expert sends a message and a decision-maker takes an action. We show that communication in this dynamic environment drastically differs from a one-shot game. Our main result is that, under certain conditions, full information revelation is possible. We provide a constructive method to build such fully revealing equilibria; our result obtains with rich communication, in which non-contiguous types pool together, thereby allowing dynamic manipulation of beliefs. Essentially, conditioning future information release on past actions improves incentives for information revelation.
Original language | English (US) |
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Pages (from-to) | 304-341 |
Number of pages | 38 |
Journal | Journal of Economic Theory |
Volume | 151 |
Issue number | 1 |
DOIs | |
State | Published - May 2014 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
Keywords
- Asymmetric information
- Cheap talk
- Dynamic strategic communication
- Full information revelation