American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Communicating about Confidence: Cheap Talk with an Ambiguity-Averse Receiver
American Economic Journal: Microeconomics
vol. 16,
no. 3, August 2024
(pp. 43–75)
Abstract
An expert, who is only informed of the probability of possible states, communicates with a decision-maker through cheap talk. The decision-maker considers different probability distributions over states as possible and is ambiguity averse. I show that all equilibria of the game are equivalent to partitional ones and that the most informative is interim dominant for the expert. Information transmission regarding probabilities that are bad news for the decision-maker is facilitated by ambiguity aversion. However, ambiguity aversion also makes information transmission impossible, whatever the preference misalignment, regarding probabilities that are good news for him.Citation
Colo, Philippe. 2024. "Communicating about Confidence: Cheap Talk with an Ambiguity-Averse Receiver." American Economic Journal: Microeconomics, 16 (3): 43–75. DOI: 10.1257/mic.20220166Additional Materials
JEL Classification
- C72 Noncooperative Games
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
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