Social and Behavioral Sciences Commons^™

Unmediated Communication In Games With Complete And Incomplete Information, Dino Gerardi

Cowles Foundation Discussion Papers

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 …