Full revelation under optional verification

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Article
Author/s: 
SimonSchopohl
Economics Letters
Issue number: 
Volume 176, March 2019
Publisher: 
Elsevier
Year: 
2019
Journal pages: 
14-16
We analyze a Sender–Receiver game in which the Sender can choose between a costless cheap-talk message and a costly verifiable message. In a discrete setting we state conditions under which the Receiver always learns the true state while the Sender uses different message types in different states. On the contrary we show that such a fully revealing equilibrium does not exist if the state and action space are continuous.
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