Seminarios

Presenta: Ennio Stacchetti (Profesor, New York University)

Lugar y hora: 29 de Mayo, 12:30 pm, Sala P-301, Edificio Placa (Diagonal Paraguay 257)

Abstract: Can the commitment assumption underlying information design be replaced by reputational enforcement? A long-run sender periodically makes cheap talk announcements to the public, anticipating how it may affect his reputation as a trustworthy type. As he becomes perfectly patient, his payoff converges to his information-design value in all equilibria. By contrast, in the standard repeated game, he typically underperforms compared to information design. In a specialized environment, we show that convergence also happens in behavior: players' equilibrium behavior coincides asymptotically with the information-design solution. We also examine welfare properties numerically by adapting strategic dynamic programming to reputational games.