Cheap talk with prior-biased inferences

• 成果类型: Article
• 署名作者: Lee, Yong-Ju; Lim, Wooyoung; Zhao, Chen
• 署名单位: Yeungnam University; Hong Kong University of Science & Technology; University of Hong Kong
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2022.12.009
• 发表日期: 2023
• 页码: 254-280
• 关键词: communication; information transmission; cheap talk; Prior bias; non-Bayesian updating

摘要

We investigate how prior-biased inferences change players' strategic incentives and result in novel welfare implications in the canonical framework of strategic information transmission. The ex ante social welfare achieved in our model exceeds the upper bound characterized in the standard environment without prior bias. The welfare gain stems from the fact that the receiver's prior bias weakens the link between the sender's message and the receiver's response without contaminating the actual content of the messages. We further show that direct communication is optimal among all possible communication protocols in the presence of a sufficient degree of prior bias.(c) 2023 Elsevier Inc. All rights reserved.