Coordination and Private Information Revelation: Failure of Information Unraveling
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This paper examines a persuasion game between two agents with one-sided asymmetric information, where the informed agent can reveal her private information prior to playing a Battle-of-the-Sexes coordination game. We find that in the presence of strategic uncertainty in coordination there exists an equilibrium where there is no 'unraveling' of information. We provide a purification argument for this mixed strategy equilibrium to strengthen the central result, which is robust to several extensions, including both-sided asymmetric information and imprecise information revelation.
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2015 ◽
Vol 15
(2)
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Keyword(s):
2015 ◽
Vol 282
(1812)
◽
pp. 20151041
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