Optimal Use of Communication Resources

Olivier Gossner, Penélope Hernández, Abraham Neyman

Econometrica · 2006 · Volume 74 · Issue 6

DOI: 10.1111/j.1468-0262.2006.00720.x

Abstract

We study a repeated game with asymmetric information about a dynamic state of nature. In the course of the game, the better-informed player can communicate some or all of his information to the other. Our model covers costly and/or bounded communication. We characterize the set of equilibrium payoffs and contrast these with the communication equilibrium payoffs, which by definition entail no communication costs.

Keywords

Communication, information economics, incomplete information, entropy, information processing

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