Multiple Referrals and Multidimensional Cheap Talk
by
Marco Battaglini
Northwestern University

Cheap talk games have been widely used to analyze situations in which a policy maker needs expert advice.  In previous work, agent uncertainty has almost always been modeled using a single-dimensional state variable.  In this paper we prove that the dimensionality of the uncertain variable has an important impact on results and yields interesting insights into the ``mechanics'' of information transmission.  Contrary to the unidimensional case, with more than one dimension full transmission of information in all states of nature is typically possible, provided a very simple and intuitive condition is satisfied.  What really matters in transmission of information is the local behavior senders' indifference curves at the ideal point of the policy maker (receiver), not the proximity of players' ideal point.  This may explain the apparent conflict between informational theories of committees and the empirical evidence on the poor alignment of preferences between the Floor and committees in legislative organization

Date received: June 9, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # cafi-36.