Abstract
We study dynamic games in which senders with state-independent payoffs communicate to a single receiver. Senders’ private information evolves according to an aperiodic and irreducible Markov chain. We prove an analog of a folk theorem—that any feasible and individually rational payoff can be approximated in a perfect Bayesian equilibrium if players are sufficiently patient. In particular, there are equilibria in which the receiver makes perfectly informed decisions in almost every period, even if no informative communication can be sustained in the stage game. We conclude that repeated interaction can overcome strategic limits of communication.
Keywords
Bayesian games; Repeated games; Communication; Folk theorem;
JEL codes
- C72: Noncooperative Games
- C73: Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
- D82: Asymmetric and Private Information • Mechanism Design
- D83: Search • Learning • Information and Knowledge • Communication • Belief
Reference
Chiara Margaria, and Alex Smolin, “Dynamic communication with biased senders”, Games and Economic Behavior, vol. 110, 2018, pp. 330–339.
Published in
Games and Economic Behavior, vol. 110, 2018, pp. 330–339