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Strategic Interpretations

Spiegler, R; Eliaz, K; Thysen, H; (2021) Strategic Interpretations. Journal of Economic Theory , 192 , Article 105192. 10.1016/j.jet.2021.105192.

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Abstract

We study strategic communication when the sender's multi-dimensional messages are given an interpretation by the sender himself or by a proxy. Interpreting messages involves the provision of some data about their statistical state-dependence. Interpretation can be selective: different kinds of data interpret different sets of message components. The receiver uses this data to decipher messages, yet he does not draw any inferences from the kind of data he is given. In this way, strategic interpretation of messages can influence the receiver's understanding of their equilibrium meaning. We show that in a two-action, two-state setting, the sender can attain his first-best payoff when the prior on one state exceeds a threshold that decays quickly with message dimensionality. We examine the result's robustness to the critique that our receiver does not attempt any inferences from selective interpretations.

Type: Article
Title: Strategic Interpretations
DOI: 10.1016/j.jet.2021.105192
Publisher version: https://doi.org/10.1016/j.jet.2021.105192
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Persuasion, Bounded rationality, Model misspecification
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10119291
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