Simple Mediation in a Cheap-Talk Game

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    In the Crawford-Sobel (uniform, quadratic utility) cheap-talk model, we consider a simple mediation scheme (a communication device) in which the informed agent reports one of N possible elements of a partition to the mediator and then the mediator suggests one of N actions to the uninformed decision-maker according to the probability distribution of the device. We show that such a simple mediated equilibrium cannot improve upon the unmediated N-partition Crawford-Sobel equilibrium when the preference divergence parameter (bias) is small.
    Original languageEnglish
    JournalUnder Review
    Journal publication date2011
    Volumex
    StatePublished - 2011

    ID: 769938