Strategic information transmission with verifiable messages

Daniel J. Seidmann, Eyal Winter

Research output: Contribution to journalArticlepeer-review

77 Scopus citations

Abstract

IF THE SENDER'S PREFERENCES are monotonic in the Receiver's action, then it is known that the Sender reveals its type in every sequential equilibrium of a Sender-Receiver game with verifiable messages (see, e.g., Milgrom (1981)). Monotonicity is a natural condition in social situations such as buyer-seller relationships; but there are obviously other situations in which the ideal action for a Sender varies with its type. Accordingly, we generalize Milgrom's result by replacing monotonicity with more general conditions on the Sender's preferences, which are sufficient for existence and uniqueness of a fully revealing equilibrium in verifiable message games. These conditions include all games in which preferences satisfy the conditions which Crawford-Sobel (1982) imposed on cheap talk games.

Original languageAmerican English
Pages (from-to)163-169
Number of pages7
JournalEconometrica
Volume65
Issue number1
DOIs
StatePublished - Jan 1997

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