Title

Unmediated Communication in Games with Complete and Incomplete Information

Authors

Dino Gerardi

Document Type

Discussion Paper

Publication Date

5-1-2002

CFDP Number

1371

CFDP Pages

73

Abstract

In this paper we study the effects of adding unmediated communication to static, finite games of complete and incomplete information. We characterize S U ( G ), the set of outcomes of a game G , that are induced by sequential equilibria of cheap talk extensions. A cheap talk extension of G is an extensive-form game in which players communicate before playing G . A reliable mediator is not available and players exchange private or public messages that do not affect directly their payoffs. We first show that if G is a game of complete information with five or more players and rational parameters, then S U ( G ) coincides with the set of correlated equilibria of G . Next, we demonstrate that if G is a game of incomplete information with at least five players, rational parameters and full support (i.e. all profiles of types have positive probability), then S U ( G ) is equal to the set of communication equilibria of G .

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