Strategic information transmission despite conflict

Abstract

We analyze a standard Crawford and Sobel’s cheap talk game in a two dimensional framework, with uniform prior, quadratic preferences and a binary disclosure rule. Information might be credibly revealed by the Sender to the Receiver when players are able to strategically set aside their conflict. We exploit the few symmetries of the game parameters to derive multiple continua of equilibria, when varying the Sender’s bias over the entire euclidean space. In particular, credible information might be revealed whatever the bias. Then we show that the equilibria exhibited characterize the game’s full set of pure strategy equilibria.