Itai Arieli, Informationally Robust Cheap-Talk

Abstract

We study the robustness of cheap-talk equilibria to infinitesimal private information of the receiver in a model with a binary state-space and a sender with state-independent utility. We show that the sender-optimal equilibrium is robust if and only if this equilibrium either reveals no information to the receiver or fully reveals one of the states with positive probability. We then characterize the actions that can be played with positive probability in any robust equilibrium. Finally, we provide a full characterization of the sender's optimal utility under infinitesimal, binary receiver's private information, and provide bounds for the optimal sender's utility under general private information.

 

Elath Hall, 2nd floor, Feldman Building, Edmond Safra Campus

 

 

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