Starting small to communicate

Arbeitspapier

We analyze a repeated cheap-talk game in which the receiver is privately informed about the conflict of interest between herself and the sender and either the sender or the receiver controls the stakes involved in their relationship. We focus on payoff-dominant equilibria that satisfy a Markovian property and show that if the potential conflict of interest is large, then the stakes increase over time, i.e., "starting small" is the unique equilibrium arrangement. In each period, the receiver plays the sender's ideal action with positive probability and the sender provides full information as long as he has always observed his ideal actions in the past. We also show that as the potential conflict of interest increases, the extent to which the stakes are back-loaded increases, i.e., stakes are initially smaller but grow faster.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 1805

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Organizational Behavior; Transaction Costs; Property Rights
• Subject: Communication ; Cheap Talk ; Reputation ; Repeated Games ; Career Path ; Gradualism ; Starting Small

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Atakan, Alp ; Koçkesen, Levent ; Kubilay, Elif
• Event: Veröffentlichung
• (who): Koç University-TÜSİAD Economic Research Forum (ERF)
• (where): Istanbul
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/202979
• Last update: 10.03.2025, 11:44 AM CET