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03.04. Micro Theory Seminar: Ennio Stacchetti

Micro Theory Seminar with Ennio Stacchetti (New York University)

Event details
What
  • Micro Theory Seminar
When Apr 03, 2019
from 16:30 to 17:45
Where Faculty Room
Contact Name Stephan Lauermann
Contact Email
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Topic

 Reputation and Information Design
 


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.



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