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Multiple Referrals and Multidimensional Cheap Talk
Author(s) -
Battaglini Marco
Publication year - 2002
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.1111/1468-0262.00336
Subject(s) - communication source , information transmission , curse of dimensionality , ideal (ethics) , variable (mathematics) , point (geometry) , mathematical economics , ideal point , transmission (telecommunications) , computer science , mathematics , econometrics , statistics , telecommunications , epistemology , mathematical analysis , computer network , philosophy , geometry
In previous work on cheap talk, uncertainty has almost always been modeled using a single–dimensional state variable. In this paper we prove that the dimensionality of the uncertain variable has an important qualitative impact on results and yields interesting insights into the “mechanics” of information transmission. Contrary to the unidimensional case, if there is more than one sender, full revelation of information in all states of nature is generically possible, even when the conflict of interest is arbitrarily large. What really matters in transmission of information is the local behavior of senders’ indifference curves at the ideal point of the receiver, not the proximity of players’ ideal point.