Economics 716: Game Theory, First Half Bart Lipman 270 Bay State Road, Office 558 617 353 2995 blipman@bu.edu http://people.bu.edu/blipman/ Fall 2017 1 Description I teach the first half of the course. My part will focus on models of communication and information transmission, including cheap talk models and models with evidence or hard information. The second half will be taught by Chiara Margaria, beginning Thursday October 26. She plans to cover dynamic social learning. 2 Requirements The requirements for my part of the course are two referee reports short (two to three page) discussions giving a thoughtful, critical summary of a paper in the literature. These will be due Thursday September 28 and Tuesday October 24. I provide more instructions for these reports on my website. 3 Office Hours My office hours will be Wednesdays from 2 to 3:30 and Fridays from 11:30 to 1. These office hours will begin Wednesday September 13 and end Wednesday October 25. Due to prior commitments, my office hours the first week of class will be only Friday September 1
8 from 11 to 1. Office hours are subject to change, with all changes announced in class. Also, of course, I will be available at other times by appointment. 4 Course Outline I will discuss only a small portion of the papers listed below and may end up covering papers not listed here. The starred readings are the ones I ll primarily discuss, while the others are to give you some guidance if you wish to do further reading and to give you some possibilities for referee reports. The papers are listed in alphabetical order within topics, not the order in which I will discuss them. I will let you know as we work our way through the literature which papers we will be covering a few lectures in advance. We will begin with Crawford and Sobel 1982. 4.1 Cheap Talk Ambrus, A., and S. Takahashi, Multi Sender Cheap Talk with Restricted State Spaces, Theoretical Economics, 3, March 2008, 1 27. Ambrus, A., E. Azevedo, and Y. Kamada, Hierarchical Cheap Talk, Theoretical Economics, 8, January 2013, 233 261. Aumann, R., and S. Hart, Long Cheap Talk, Econometrica, 71, November 2003, 1619 1660. Battaglini, M., Multiple Referrals and Multidimensional Cheap Talk, Econometrica, 70, July 2002, 1379 1401. Blume, A., O. Board, and K. Kawamura, Noisy Talk Theoretical Economics, 2, December 2007, 395 440. Chakraborty, A., and R. Harbaugh, Comparative Cheap Talk, Journal of Economic Theory, 132, January 2007, 70 94. Che, Y.-K., W. Dessein, and N. Kartik, Pandering to Persuade, American Economic Review, 103, February 2013, 47 79. Chiba, S., and K. Leong, Cheap Talk with Outside Options, working paper, December 2014. Crawford, V., and J. Sobel, Strategic Information Transmission, Econometrica, 50, November 1982, 1431 1451. 2
Dessein, W., Authority and Communication in Organizations, Review of Economic Studies, 69, October 2002, 811 838. Farrell, J., and R. Gibbons, Cheap Talk with Two Audiences, American Economic Review, 79, December 1989, 1214 1223. Forges, F., Equilibria with Communication in a Job Market Example, Quarterly Journal of Economics, 105, May 1990, 375 398. Frankel, A., and N. Kartik, Muddled Information, working paper, January 2016. Gentzkow, M., and J. Shapiro, Media Bias and Reputation, Journal of Political Economy, 114, 2006, 280 316. Golosov, M., V. Skreta, A. Tsyvinski, and A. Wilson, Dynamic Strategic Information Transmission, Journal of Economic Theory, 151, 2014, 304 341. Goltsman, M., J. Horner, G. Pavlov, and F. Squintani, Mediation, Arbitration and Negotiation, Journal of Economic Theory, 144, July 2009, 1397 1420. Hagenbach, J., and F. Koessler, Strategic Communication Networks, Review of Economic Studies, 77, July 2010, 1072 1099. Ivanov, M., Information Control and Organizational Design, Journal of Economic Theory, 145, March 2010, 721 751. Ivanov, M., Communication via a Strategic Mediator, Journal of Economic Theory, 145, March 2010, 869 884. Krishna, V., and J. Morgan, A Model of Expertise, Quarterly Journal of Economics, 116, May 2001, 747 775. Krisha, V., and J. Morgan, The Art of Conversation: Eliciting Information from Experts through Multi Stage Communication, Journal of Economic Theory, 117, August 2004, 147 179. Levy, G., and R. Razin, On the Limits of Communication in Multidimensional Cheap Talk: A Comment, Econometrica, 75, May 2007, 885 893. Li, M., and K. Madarasz, When Mandatory Disclosure Hurts: Expert Advice and Conflicting Interests, Journal of Economic Theory, 139, March 2008, 47 74. Matthews, S., Veto Threats: Rhetoric in a Bargaining Game, Quarterly Journal of Economics, 104, May 1989, 347 369. Morris, S., Political Correctness, Journal of Political Economy, 109, April 2001, 231 3
265. Ogden, B., Multidimensional Strategic Communication with Uncertain Salience, working paper, 2016. Sobel, J., Giving and Receiving Advice, in D. Acemoglu, M. Arellano, and E. Dekel, eds., Advances in Economics and Econometrics: Tenth World Congress, Cambridge University Press, 2013. 4.2 Evidence, Etc. 4.2.1 Games Acharya, V., P. DeMarzo, and I. Kremer, Endogenous Information Flows and the Clustering of Announcements, American Economic Review, December 2011. Ben-Porath, E., E. Dekel, and B. Lipman, Disclosure and Choice, working paper, January 2017. Caillaud, B., and J. Tirole, Consensus Building: How to Persuade a Group, American Economic Review, 97, 2007, 1877 1900. Che, Y.-K., and N. Kartik, Opinions as Incentives, Journal of Political Economy, 117, October 2009, 815 860. DeMarzo, P., I. Kremer, and A. Skrzypacz, Test Design and Disclosure, working paper, 2017. Dye, R. A., Disclosure of Nonproprietary Information, Journal of Accounting Research, 23, 1985, 123 145. Dziuda, W., Strategic Argumentation, Journal of Economic Theory, 146, 2011, 1362 1397. Dziuda, W., Communication with Detectable Deceit, working paper, February 2012. Fishman, M., and K. Hagerty, The Optimal Amount of Discretion to Allow in Disclosure, Quarterly Journal of Economics, 105, May 1990, 427 444. Glazer, J., and A. Rubinstein, On Optimal Rules of Persuasion, Econometrica, 72, November 2004, 1715 1736. Glazer, J., and A. Rubinstein, A Study in the Pragmatics of Persuasion: A Game 4
Theoretical Approach, Theoretical Economics, 1, December 2006, 395 410. Grossman, S., The Informational Role of Warranties and Private Disclosure about Product Quality, Journal of Law and Economics, 24, 1981, 461 483. Gul, F., and W. Pesendorfer, The War of Information, Review of Economic Studies, 79, April 2012, 707 734. Guttman, I., I. Kremer, and A. Skrzypacz, Not Only What but also When: A Theory of Dynamic Voluntary Disclosure, American Economic Review, 104, August 2014, 2400 2420. Hagenbach, J., F. Koessler, and E. Perez-Richet, Certifiable Pre Play Communication: Full Disclosure, Econometrica, 82, May 2014, 1093 1131. Jung, W., and Y. Kwon, Disclosure When the Market is Unsure of Information Endowment of Managers, Journal of Accounting Research, 26, 1988, 146 153. Kamenica, E., and M. Gentzkow, Bayesian Persuasion, American Economic Review, 101, October 2011, 2590 2615. Kartik, N., Strategic Communication with Lying Costs, Review of Economic Studies, 76, October 2009, 1359 1395. Kartik, N., M. Ottaviani, and F. Squintani, Credulity, Lies, and Costly Talk, Journal of Economic Theory, 134, May 2007, 93 116. Lipman, B., and D. Seppi, Robust Inference in Communication Games with Partial Provability, Journal of Economic Theory, 66, August 1995, 370-405. Milgrom, P., Good News and Bad News: Representation Theorems and Applications, Bell Journal of Economics, 12, 1981, 380 391. Milgrom, P., and J. Roberts, Relying on the Information of Interested Parties, Rand Journal of Economics, 17, 1986, 18 32. Okuno Fujiwara, M., A. Postlewaite, and K. Suzumura, Strategic Information Revelation, Review of Economic Studies, 57, 1990, 25 47. Quigley, D., and A. Walther, Crowding out Disclosure, working paper, February 2016. Rayo, L., and I. Segal, Optimal Information Disclosure, Journal of Political Economy, 118, October 2010, 949 987. Shin, H. S., The Burden of Proof in a Game of Persuasion, Journal of Economic Theory, 64, 1994a, 253 263. 5
Shin, H. S., News Management and the Value of Firms, Rand Journal of Economics, 25, 1994b, 58 71. Shin, H. S., Disclosures and Asset Returns, Econometrica, 71, January 2003, 105 133. Verrecchia, R., Discretionary Disclosure, Journal of Accounting and Economics, 5, 1983, 179 194. 4.2.2 Mechanism Design and Implementation Ben-Porath, E., and B. Lipman, Implementation and Partial Provability, Journal of Economic Theory, 147, September 2012, 1689 1724. Ben-Porath, E., E. Dekel, and B. Lipman, Mechanisms with Evidence: Commitment and Robustness, working paper, January 2017. Bull, J., and J. Watson, Hard Evidence and Mechanism Design, Games and Economic Behavior, 58, January 2007, 75 93. Deneckere, R. and S. Severinov, Mechanism Design with Partial State Verifiability, Games and Economic Behavior, 64, November 2008, 487 513. Green, J., and J.-J. Laffont, Partially Verifiable Information and Mechanism Design, Review of Economic Studies, 53, July 1986, 447 456. Hart, S., I. Kremer, and M. Perry, Evidence Games: Truth and Commitment, working paper, March 2016. Kartik, N., and O. Tercieux, Implementation with Evidence, Theoretical Economics, 7, May 2012, 323 355. Koessler, F., and V. Skreta, Selling with Evidence, working paper, May 2017. Koessler, F., and V. Skreta, Informed Seller with Taste Heterogeneity, Journal of Economic Theory, 165, September 2016, 456 471. Sher, I., Credibility and Determinism in a Game of Persuasion, Games and Economic Behavior, 71, March 2011, 409 419. Sher, I., and R. Vohra, Price Discrimination through Communication, Theoretical Economics, 10, May 2015, 597 648. 6
4.2.3 Costly Verification Ben-Porath, E., E. Dekel, and B. Lipman, Optimal Allocation with Costly Verification, American Economic Review, 104, December 2014, 3779 3813. Erlanson, A., and A. Kleiner, Costly Verification in Collective Decisions, working paper, November 2015. 4.3 Language Blume, A., Coordination and Learning with a Partial Language, Journal of Economic Theory, 95, November 2000, 1 36. Blume, A., and O. Board, Intentional Vagueness,, August 2012. Blume, A., and O. Board, Language Barriers, Econometrica, 81, March 2013, 781 812. Cremer, J., L. Garicano, and A. Prat, Language and the Theory of the Firm, Quarterly Journal of Economics, 122, February 2007, 373 407. Glazer, J., and A. Rubinstein, A Model of Persuasion with Boundedly Rational Agents, Journal of Political Economy, 120, December 2012, 1057 1082. Hagenbach, J., and F. Koessler, Simple versus Rich Language in Disclosure Games, working paper, June 2016. Lipman, B., Language and Economics, in N. Dimitris, M. Basili, and I. Gilboa, Cognitive Processes and Rationality in Economics, London: Routledge, 2003. (Also on my webpage.) Lipman, B., Why is Language Vague?, working paper, November 2009. Rubinstein, A., Economics and Language, Cambridge: Cambridge University Press, 2000. 7