Strategic Communication Games: Theory and Applications

Abstract

The dissertation consists of three papers on the theory and application of strategic communication games. Strategic communication games are costless sender-receiver games, and address the question of how much information can be credibly transmitted in equilibrium, and what kind of communication environments facilitate information transmission. The second chapter, “Multidimensional Cheap Talk with Sequential Messages,” studies a twodimensional cheap talk game with two senders and one receiver. The senders possess the same information and sequentially send messages about that information. In one-dimensional sequential message cheap talk games where the state space is unbounded, the information is fully transmitted under a self-serving belief, as suggested by Krishna and Morgan (2001b). However, this result depends crucially on the structure of the one-dimensional model. We show that a self-serving belief does not support full information transmission in two-dimensional models. We consider an extended self-serving belief, which implies full information transmission even if a self-serving belief cannot work. Then, We show that a necessary and sufficient condition for the existence of the fully revealing equilibrium is that the senders have opposing-biased preferences. The third chapter, “A Characterization of Equilibrium Set of Persuasion Games without Single Crossing Conditions,” considers a persuasion game between one sender and one receiver. The sender’s private information is completely verifiable and the receiver has binary alternatives. However, the single crossing condition by Giovannoni and Seidmann (2007) is violated. That is, full information disclosure is impossible. We characterize the set of pure strategy equilibria by specifying the set of equilibrium ex ante expected utility of the receiver. The set is characterized by the maximum and the minimum utility of the receiver, and any value between them can be supported ii as equilibrium ex ante expected utility of the receiver. In any equilibrium, the sender can conceal a part of unfavorable information, but cannot suppress all of the information if conflicts between the players happen frequently enough. When mass media strategically suppress election-relevant information in order to influence public opinion, how do candidates and voters react to this media manipulation? To answer this question, the fourth chapter, “Manipulated News: Electoral Competition and Mass Media,” develops a simple Downsian voting model including mass media. The media outlets observe the proposed policies by the two candidates, but the voter cannot. The voter then learns this information through reports from the outlets before voting occurs. The media outlets strategically choose either to disclose or withhold the information. In the model with single media outlet, we show that the voter’s decision making could be incorrect ex post in any equilibrium when the media outlet’s preference is sufficiently different from that of the voter. Appealing to the voter then becomes less attractive to the candidates. Furthermore, the candidates have an incentive to influence the media outlet’s behavior through policy settings. Through the distortions in the behaviors of the voter and the candidates, the equilibrium outcomes are distorted in favor of the media outlet; that is, the median voter theorem could fail. This distortion mechanism can be observed even if there are multiple media outlets when their preferences are like-biased. However, if the media outlets’ preferences are opposing-biased, then the median voter theorem holds.