Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202979
Authors: 
Atakan, Alp
Koçkesen, Levent
Kubilay, Elif
Year of Publication: 
2018
Series/Report no.: 
Working Paper 1805
Abstract: 
We analyze a repeated cheap-talk game in which the receiver is privately informed about the conflict of interest between herself and the sender and either the sender or the receiver controls the stakes involved in their relationship. We focus on payoff-dominant equilibria that satisfy a Markovian property and show that if the potential conflict of interest is large, then the stakes increase over time, i.e., "starting small" is the unique equilibrium arrangement. In each period, the receiver plays the sender's ideal action with positive probability and the sender provides full information as long as he has always observed his ideal actions in the past. We also show that as the potential conflict of interest increases, the extent to which the stakes are back-loaded increases, i.e., stakes are initially smaller but grow faster.
Subjects: 
Communication
Cheap Talk
Reputation
Repeated Games
Career Path
Gradualism
Starting Small
JEL: 
D82
D83
D23
Document Type: 
Working Paper

Files in This Item:
File
Size
445.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.