On Communication and Collusion

2016 ◽  
Vol 106 (2) ◽  
pp. 285-315 ◽  
Author(s):  
Yu Awaya ◽  
Vijay Krishna
Keyword(s):  
Cheap Talk ◽  
Discount Factor

We study the role of communication within a cartel. Our analysis is carried out in Stigler’s (1964) model of repeated oligopoly with secret price cuts. Firms observe neither the prices nor the sales of their rivals. For a fixed discount factor, we identify conditions under which there are equilibria with “cheap talk” that result in near-perfect collusion, whereas all equilibria without such communication are bounded away from this outcome. In our model, communication improves monitoring and leads to higher prices and profits. (JEL C73, D43, D83, L12, L13, L25)

scholarly journals Communication and cooperation in repeated games

2019 ◽  
Vol 14 (2) ◽  
pp. 513-553 ◽  
Author(s):  
Yu Awaya ◽  
Vijay Krishna
Keyword(s):  
Nash Equilibrium ◽  
Repeated Games ◽  
Cheap Talk ◽  
Discount Factor ◽  
Correlated Equilibrium ◽  
Private Monitoring

We study the role of communication in repeated games with private monitoring. We first show that without communication, the set of Nash equilibrium payoffs in such games is a subset of the set ofε‐coarse correlated equilibrium payoffs (ε‐CCE) of the underlying one‐shot game. The value ofεdepends on the discount factor and the quality of monitoring. We then identify conditions under which there are equilibria with “cheap talk” that result in nearly efficient payoffs outside the setε‐CCE. Thus, in our model, communication is necessary for cooperation.

Common Knowledge and Cheap Talk in Democratic Discourse and Law

2021 ◽  
pp. 147-164
Author(s):  
Richard R. W. Brooks
Keyword(s):  
Game Theory ◽  
Common Knowledge ◽  
Common Law ◽  
Cheap Talk ◽  
Public Communication ◽  
Costly Signaling ◽  
The Public ◽  
Game Theoretic ◽  
Key Aspects

This commentary illuminates key aspects of Shiffrin’s view by appeal to concrete examples and notions from game theory. It underscores the role of law as a means for the public communication of moral commitments by invoking the idea of common knowledge. Our commitments must be known to be shared, that knowledge itself must be known to be shared, and so on ad infinitum. This offers a perspective on the importance of common law from a democratic framework: common law can be seen as a mechanism for generating common knowledge about disputes and their resolution. The commentary invokes another game-theoretic notion, that of the contrast between cheap talk and costly signaling, to illuminate Shiffrin’s discussion of constitutional balancing. Where the interests of speaker and addressee are not aligned, cheap talk lacks credibility, and this is something to which courts need to be sensitive in balancing state and constitutional interests.

DYNAMICS OF OPEN-ECONOMY BUSINESS-CYCLE MODELS: ROLE OF THE DISCOUNT FACTOR

2003 ◽  
Vol 7 (2) ◽  
pp. 263-290 ◽  
Author(s):  
Sunghyun Henry Kim ◽  
M. Ayhan Kose
Keyword(s):  
Business Cycle ◽  
Open Economy ◽  
Discount Factor ◽  
Asset Markets ◽  
Interest Rate Shocks ◽  
Approximation Errors ◽  
Incomplete Asset Markets ◽  
The Moment ◽  
Parameter Values

This paper examines the dynamic implications of different preference formulations in open-economy business-cycle models with incomplete asset markets. In particular, we study two preference formulations: a time-separable preference formulation with a fixed discount factor, and a time-nonseparable preference structure with an endogenous discount factor. We analyze the moment implications of two versions of an otherwise identical open-economy model—one with a fixed discount factor and the other with an endogenous discount factor—and study impulse responses to productivity and world real-interest-rate shocks. Our results suggest that business-cycle implications of the two models are quite similar under conventional parameter values. We also find that the approximation errors associated with the solutions of these two models are of the same magnitude.

Role of dactinomycin in the improved survival of children with Wilms' tumor

JAMA ◽  
1966 ◽  
Vol 195 (12) ◽  
pp. 1005-1009 ◽  
Author(s):  
D. J. Fernbach
Keyword(s):  
Wilms Tumor

Role of the allergist in diagnosis and management of patients with uveitis

JAMA ◽  
1966 ◽  
Vol 195 (3) ◽  
pp. 167-172 ◽  
Author(s):  
T. E. Van Metre
Keyword(s):  
Diagnosis And Management
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