Article ID Journal Published Year Pages File Type
5071453 Games and Economic Behavior 2016 38 Pages PDF
Abstract
A seller wants a buyer to choose a good whose value is the seller's private information. The buyer's memory is limited, and she decides whether to remember the good conditional on a signal about the value. The seller then decides whether to send a costless message that can remind the buyer of the good. Since the reminder could convey the seller's private information in equilibrium, whether to send a reminder is a non-trivial question. It is shown that costless messages can be informative in equilibrium in spite of the strong conflict of interest between the players. In any informative equilibrium, silence conveys positive information about the value, whereas the reminder conveys negative information.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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