Uninformed Receiver Research Articles

Toxic types and infectious communication breakdown

We study an environment where an informed sender has conflicting interests with an uninformed receiver only in some states. Using an “infection-like” argument, we show that with symmetric loss functions, the presence of such disagreement states - even if they are very rare - leads to coarse communication in all states, even those where, following communication, it is commonly known that the players' interests are perfectly aligned. However, with asymmetric loss functions, one can construct examples with truthful communication in some set of states.

Multistage information transmission with voluntary monetary transfers

We analyze a cheap‐talk model in which an informed sender and an uninformed receiver engage in a finite‐period communication before the receiver chooses a project. During the communication phase, the sender sends a message in each period, and the receiver then voluntarily pays money for the message. As in the canonical cheap‐talk model, all the equilibria are interval partitional; in our setting, however, the set of equilibrium partitions becomes larger. We show that the multistage information transmission with voluntary monetary transfers can improve welfare if the receiver cares more about the decision and the sender cares more about money or if the ex post sender–receiver incentive conflict over the project choice is small. We derive a multistage information elicitation mechanism without commitment that can be more beneficial to the receiver than a broad class of other communication protocols (e.g., mediation and arbitration).

On Strategic Transmission of Gradually Arriving Information

The main insight of the literature on strategic information transmission is that even a small conflict of interest between a fully informed sender (e.g., a financial adviser) and an uninformed receiver (an investor) often poses considerable difficulties for effective communication. However, in many real-life situations, the sender is not fully informed at the outset but gradually studies the case before offering advice. The gradual arrival of information to the sender weakens the strategic barriers between the players and significantly improves communication.

Relational communication

We study a communication game between an informed sender and an uninformed receiver with repeated interactions and voluntary transfers. Transfers motivate the receiver's decision‐making and signal the sender's information. Although full separation can always be supported in equilibrium, partial or complete pooling is optimal if the receiver's decision‐making is highly responsive to information. In this case, the receiver's decision‐making is disciplined by pooling states where she is most tempted to defect.

Evasion of guilt in expert advice

We develop a model of strategic communication between an uninformed receiver and a partially informed sender who is guilt-averse toward the receiver. The sender’s cost of sending a particular message is endogenous, depending on the receiver’s beliefs induced by this message rather than on its exogenous formulation. Such preferences lead to the endogenous emergence of evasive communication in that the sender types who prefer not to reveal their information to the receiver pool with uninformed types rather than with types observing different information. As a result, the receiver may prefer an equilibrium with a smaller amount of messages used on the equilibrium path. Besides, dealing with an ex ante less informed sender can be beneficial to the receiver, while the sender himself may want to commit to a smaller ex ante likelihood of being informed.

Lies and consequences

I study a strategic-communication game between an informed sender and an uninformed receiver with partially aligned preferences. The receiver is endowed with the ability to probabilistically detect if the sender is lying. Specifically, if the sender is making a false claim about her type, with some commonly known probability p the receiver additionally observes a private signal indicating that the sender is lying. The main result is that the receiver’s stochastic lie-detection ability makes fully revealing equilibria—the best outcome for the receiver—possible, even for small p (less than $$\frac{1}{2}$$ ). Additionally, if the language consists of precise messages, fully revealing equilibria exist only for $$p=1$$ and for a set of intermediate values of p that is bounded away from 0 and 1, making the maximal ex-ante expected equilibrium utility of the receiver non-monotone in p. If vague messages are allowed, full revelation can be supported for all large enough p, overturning the non-monotonicity and improving communication outcomes relative to the precise-language case.

Relational Communication

We study a communication game between an informed sender and an uninformed receiver with repeated interactions and voluntary transfers. Transfers motivate the receiver's decision‐making and signal the sender's information. Although full separation can always be supported in equilibrium, partial or complete pooling is optimal if the receiver's decision‐making is highly responsive to information. In this case, the receiver's decision‐making is disciplined by pooling states where she is most tempted to defect.

Cheap Talk with Strategic Substitutability

In the classic Crawford-Sobel (CS) model of strategic communication between an informed Sender and uninformed Receiver, perfect information transmission is never achieved as an equilibrium outcome. I present a modified version of the CS cheap talk game with the following two innovations: (i) both players take actions, and (ii) actions are strategic substitutes. In contrast to the CS setup, the modified game can facilitate perfect information revelation. I characterize the conditions under which a full information revelation equilibrium exists. When these conditions are violated, only partial revelation equilibria exist. Under partial revelation, the Sender reveals information up to a threshold state and pools beyond this threshold, resulting in some loss of information. Welfare analysis suggests that partial revelation equilibria with a higher threshold pareto dominate those with lower thresholds. Crucially, a higher threshold equilibrium is also interim efficient – every Sender type at least weakly prefers this over a lower threshold equilibrium.

Multistage Information Transmission with Voluntary Monetary Transfer

We analyze a cheap talk model in which an informed sender and an uninformed receiver engage in finite-period communication before the receiver chooses a project. During the communication phase, in each period, the sender sends a cheap talk message and the receiver voluntarily pays money for the message she receives. Our results show that combining multistage information transmission with the receiver's voluntary payments can improve welfare. Moreover, we find an upper bound of the receiver's equilibrium payoff and provide a sufficient condition for it to be approximated by the receiver's equilibrium payoff. This result shows that multistage information transmission with voluntary monetary transfer can be more beneficial for the receiver than a wide class of other communication protocols (e.g., mediation and arbitration).

Relational Communication with Transfers

We enrich the Crawford and Sobel (1982) model of strategic communication between an informed sender and an uninformed receiver by adding repeated interactions and voluntary transfer payments. Transfers play two roles here: they incentivise decision-making and signal information. Although full separation can be frictionlessly attained in equilibrium, partial or complete pooling is optimal if preferences are suciently divergent. In this case, extreme information is optimally pooled to discipline the receiver’s decision-making by reducing her reneging temptation. As an extension, we consider a partially-informed receiver. As the receiver becomes more informed, welfare strictly decreases because self-enforcing agreements become harder to sustain.

Cheap talk with an informed receiver

This paper considers a model of strategic information transmission with an imperfectly informed receiver and provides a simple logic by which the receiver’s prior knowledge becomes an impediment to efficient communication. We show that the extent of communication is severely limited as the receiver becomes more informed. Moreover, in a simple example with two signals, we show that no information can be conveyed via cheap talk for an arbitrarily small degree of preference incongruence. This result draws sharp contrast to the case with an uninformed receiver which always yields a fully separating equilibrium as long as the preferences are sufficiently congruent.

Beneficial mediated communication in cheap talk

This paper investigates mediated communication between an informed sender and an uninformed receiver with conflicting preferences in the framework of Crawford and Sobel (1982). It provides a simple condition for mediation to be beneficial, that is, to give the receiver a higher ex-ante payoff than the uninformed decision. This condition in turn allows us to identify scenarios in which mediation is beneficial while all cheap-talk equilibria are uninformative. Our condition extends the conditions for beneficial mediation with a binary type space (Mitusch and Strausz, 2005) and mediation via a biased mediator (Ambrus et al., 2013). Finally, we show the connection between the identified condition and related conditions in other conflict resolution schemes: delegation (Alonso and Matouschek, 2008) and arbitration (Kovác and Mylovanov, 2009).

Asymptotic Full Revelation in Cheap Talk with Large Number of Senders

Strategic information transmission, commonly referred to as "cheap talk", was first introduced by Crawford and Sobel (1982), who showed that there is only limited amount of information that can be transmitted between an informed sender and an uninformed receiver. There were attempts to achieve full revelation by introducing several senders, but they rely on unreasonable off-the-equilibrium-path beliefs. This paper shows that in the situation with one receiver and N senders, even if senders are limited to sending only two types of signals, and state space is fixed, asymptotically there is robust full revelation, so that the receiver gets to know the state of the world almost perfectly, as the number of senders goes to infinity.

The Hidden Value of Lying: Evasion of Guilt in Expert Advice

I develop a model of strategic communication between an uninformed receiver and a partially informed sender who is averse to lying. The sender's cost of lying is endogenous, depending on the receiver's beliefs induced by the sender's message, rather than on its exogenous formulation. Such preferences lead to the endogenous emergence of evasive communication, i.e., misreporting of the precision of obtained information. In turn, this gives rise to specific predictions regarding welfare implications of several conventional policies. In particular, prohibition of lying (i.e., of explicit falsification) may lead to a decrease in the receiver's welfare under certain conditions. Besides, dealing with ex-ante less informed sender can be beneficial to the receiver.

Nash Codes for Noisy Channels

This paper studies the stability of communication protocols that deal with transmission errors. We consider a coordination game between an informed sender and an uninformed receiver, who communicate over a noisy channel. The sender’s strategy, called a code, maps states of nature to signals. The receiver’s best response is to decode the received channel output as the state with highest expected receiver payoff. Given this decoding, an equilibrium or “Nash code” results if the sender encodes every state as prescribed. We show two theorems that give sufficient conditions for Nash codes. First, a receiver-optimal code defines a Nash code. A second, more surprising observation holds for communication over a binary channel, which is used independently a number of times, a basic model of information transmission: under a minimal “monotonicity” requirement for breaking ties when decoding, which holds generically, every code is a Nash code.

Cheap talk with two senders and complementary information

This paper studies a cheap talk model in which two senders having partial and non-overlapping private information simultaneously communicate with an uninformed receiver. The sensitivity of the receiverʼs ideal action to one senderʼs private information depends on the other senderʼs private information. We show that the sendersʼ information transmissions exhibit strategic complementarity: more information transmitted by one sender leads to more information being transmitted by the other sender.

Not so cheap talk: costly and discrete communication

We model an interaction between an informed sender and an uninformed receiver. As in the classic cheap talk setup, the informed player sends a message to an uninformed receiver who is to take an action which affects the payoffs of both players. However, in our model, the sender can communicate only through the use of discrete messages which are ordered by the cost incurred by the sender. We characterize the resulting equilibria without refining out-of-equilibrium beliefs. Subsequently, we apply an adapted version of the no incentive to separate (NITS) condition to our model. We show that if the sender and receiver have aligned preferences regarding the action of the receiver, then NITS only admits the equilibrium with the largest possible number of induced actions. When the preferences between players are not aligned, we show that NITS does not guarantee uniqueness, and we provide an example where an increase in communication costs can improve communication. As we show, this improvement can occur to such an extent that the equilibrium outperforms the Goltsman et al. (J Econ Theory 144:1397–1420, 2009) upper bound for receiver’s payoffs in mediated communication.

A Theory of Multidimensional Information Disclosure

This paper studies the optimal disclosure policy of multidimensional information when the sender can commit ex ante to the policy. By controlling the information available to an uninformed receiver, the sender controls the distribution of the receiver’s posterior expectations. Assuming quadratic preferences, we derive an upper bound of the sender’s ex ante utility based on semidefinite programming, and show that a linear transformation of the state is optimal if it is normally distributed. In addition, we examine extensions in which the receiver has private information and there are multiple senders. Applications of our theory include information sharing in an oligopoly.

Not So Cheap Talk: Costly and Discrete Communication

We model an interaction between an informed sender and an uninformed receiver. As in the classic cheap talk setup, the informed player sends a message to an uninformed receiver who is to take an action which affects the payoffs of both players. However, in our model the sender can communicate only through the use of discrete messages which are ordered by the cost incurred by the sender. We characterize the resulting equilibria without refining out-of-equilibrium beliefs. Subsequently, we apply an adapted version of the no incentive to seperate (NITS) condition to our model. We show that if the sender and receiver have aligned preferences regarding the action of the receiver then NITS only admits the equilibrium with the largest possible number of induced actions. When the preferences between players are not aligned, we show that NITS does not guarantee uniqueness and we provide an example where an increase in communication costs can improve communication. As we show, this improvement can occur to such an extent that the equilibrium outperforms the Goltsman et al. (2009) upper bound for receiver's payoffs in mediated communication.

Power and the Privilege of Clarity: An Analysis of Bargaining Power and Information Transmission

People in inferior bargaining positions are often vaguer when they express their preferences. In this paper, we explain how power shapes clarity of communication. We analyze information transmission in a cheap talk bargaining game between an informed Sender and an uninformed Receiver. Our main result is that the maximum amount of information transmission is increasing in the relative power of the Sender. As a result, clarity is a privilege of the powerful. In our model, only Senders whose preferences are closely aligned with the Receiver can completely reveal their information in equilibrium. We discuss some testable implications of our model.