Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296411 
Year of Publication: 
2023
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 18 [Issue:] 1 [Year:] 2023 [Pages:] 267-301
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We analyze a cheap-talk model in which an informed sender and an uninformed receiver engage in a finite-period communication before the receiver chooses a project. During the communication phase, the sender sends a message in each period, and the receiver then voluntarily pays money for the message. As in the canonical cheap-talk model, all the equilibria are interval partitional; in our setting, however, the set of equilibrium partitions becomes larger. We show that the multistage information transmission with voluntary monetary transfers can improve welfare if the receiver cares more about the decision and the sender cares more about money or if the ex-post sender--receiver incentive conflict over the project choice is small. We derive a multistage information elicitation mechanism without commitment that can be more beneficial to the receiver than a broad class of other communication protocols (e.g., mediation and arbitration).
Subjects: 
cheap talk
Incomplete information
multistage strategic communication
voluntary monetary transfers
JEL: 
C72
C73
D82
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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