Economics Seminar (Theory): Andreas Blume, University of Arizona

Andreas Blume is a McClelland Professor of Economics at the University of Arizona.

TOPIC: Information Sharing in Conversations

ABSTRACT: When players share information incrementally through talking, without constraints on duration and talking order, they engage in a conversation. With aligned interests, for such incremental information exchange to be efficient, there have to be language constraints: we equate talking with disclosing, limit players to disclosing singleton subsets of the sets of states they consider possible, and assume that the contents of simultaneous talk are lost. In a literal-meaning equilibrium, the information conveyed by a disclosure coincides (as nearly as possible) with what is disclosed. We show that every talking order can be supported by a literal-meaning equilibrium, while in optimal literal-meaning equilibria only the better informed player talks and interlocutors address different topics in the order of who is better informed on each topic. Pragmatic-meaning equilibria encode more information in a disclosure than what is disclosed. Optimal pragmatic-meaning equilibria strictly improve on optimal literal-meaning equilibria and generally require that with positive probability both players talk simultaneously.