
doi: 10.2307/2951741
It is often the case that an individual's decision is at least partly based on information received from another. And when the agents' payoffs depend on both the former's decision and on the latter's information, there is an incentive for the informed individual to attempt to bias the decision maker's decision in his or her favor by strategically manipulating the information transmitted. In a seminal paper, Crawford and Sobel (1982) (hereafter, C/S) study such strategic information transmission in the context of an abstract sender/receiver game. This paper examines some implications of the verifiability problem inherent in demonstrating ignorance for the canonic C/S model. The main result is that informative signaling is possible for a wider range of parameter values than is possible when the receiver is sure the sender is informed. The intuition is as follows. Under the verifiability constraint, ``low'' sender types can pool with the uninformed ``type,'' leaving the receiver unsure as to whether the message is sent by an informed ``low'' type or an uninformed sender; the receiver's uncertainty leads to a relatively favorable action for the ``low'' types as compared to that induced when the receiver knows the sender is a ``low'' type for sure, and since it is ``low'' types who have the incentive to mimic the behavior of ``high'' types, this response enables some ``high'' types to distinguish themselves more easily than when the receiver is sure the sender is informed.
sender/receiver game, Economics of information, verifiability problem, Applications of game theory, 2-person games
sender/receiver game, Economics of information, verifiability problem, Applications of game theory, 2-person games
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