Dynamic communication with biased senders
Files
Accepted manuscript
Date
2018-07-01
Authors
Margaria, Chiara
Smolin, Alex
Version
Accepted manuscript
Embargo Date
2020-07-01
OA Version
Citation
Chiara Margaria, Alex Smolin. 2018. "Dynamic communication with biased senders." GAMES AND ECONOMIC BEHAVIOR, Volume 110, pp. 330 - 339 (10). https://doi.org/10.1016/j.geb.2017.10.017
Abstract
We study dynamic games in which senders with state-independent payoffs communicate to a single receiver. Senders' private information evolves according to an aperiodic and irreducible Markov chain. We prove an analog of a folk theorem—that any feasible and individually rational payoff can be approximated in a perfect Bayesian equilibrium if players are sufficiently patient. In particular, there are equilibria in which the receiver makes perfectly informed decisions in almost every period, even if no informative communication can be sustained in the stage game. We conclude that repeated interaction can overcome strategic limits of communication.