A Unified Modeling Perspective to Compare Cheap Talk and Information Design
Consider the information game with one sender, one receiver, defined by $$ \lang \Omega, M, A, \mu_0, v, u\rang $$ where $\Omega$ is the state of the world $M$ is the space of messages $A$ is receiver’s action $\mu_0$ is the prior Sender’s payoff $v:A\times \Omega \to \R$ Receiver’s payoff: $u:A\times \Omega \to \R$. Sender’s strategy $\sigma:\Omega \to \Delta(M)$. Receiver’s strategy $\rho: M\to \Delta (A)$ A Cheap Talk Game proceeds as follows: ...