Credulity, lies, and costly talk

Abstract

This paper studies a model of strategic communication by an informed and upwardly biased sender to one or more receivers. Applications include situations in which (i) it is costly for the sender to misrepresent information, due to legal, technological, or moral constraints, or (ii) receivers may be credulous and blindly believe the sender's recommendation. In contrast to the predictions obtained in Crawford and Sobel's [9] benchmark cheap talk model, our model admits a fully separating equilibrium, provided that the state space is unbounded above. The language used in equilibrium is inflated and naive receivers are deceived.

Revisiting games of incomplete information with analogy-based expectations

“…This should be contrasted with Kartik et al (2007) who exhibit biased equilibrium outcomes in a variant of Crawford and Sobel's (1982) model where the receiver is naive (i.e., blindly plays the recommended action) with an exogenous and strictly positive probability. 27…”

Incentive compatibility and differentiability: New results and classic applications

“…The condition V 12 ≤ 0 ("manipulation monotonicity"), required in Theorem 4.3, is mild and satisfied in almost all examples we know of (though it does fail in Kartik, Ottaviani, and Squintani (2007)). It requires that the informed agent's gain from manipulating the uninformed beliefs upwards does not increase in her type.…”

Optimal sequential delegation

“…Consider an arbitrary menu (D h , D ) of delegation sets. 18 Let p ∈ {h, } and consider an action y / ∈ D p which is non-redundant in the sense that, when added to the delegation set, it would be chosen in some state, i.e.,…”