Multi-period competitive cheap talk with highly biased experts

Abstract

Each of n experts communicates with a principal about the privately observed quality of the expert's own project via cheap talk, with new independently drawn projects available each period until the principal adopts one. Even when experts are highly biased in that they only receive a positive payoff if their own project is selected, we show that informative equilibria may exist, characterize a large class of stationary equilibria, and find the Pareto dominant symmetric equilibrium. Experts face a tradeoff between inducing acceptance now versus waiting for a better project should the game continue. When the future is more highly valued experts send more informative messages, increasing the average quality of an adopted project and resulting in a Pareto improvement, while communication is harmed and payoffs can decline when there is more competition between experts.