Informal communication

The typical sender-receiver game studied in the literature assumes that receiver is uninformed. I analyze a model where receiver has private information and sender cares to be perceived as honest. If sender's honesty concerns are strong enough, the model predicts information revelation as a unique equilibrium. This uniqueness result contrasts with the multiplicity of equilibria in games with uninformed receiver. To achieve information revelation as a unique equilibrium, receiver may have to ask for information, which is extraneous for her decision. If sender's honesty concerns are not too strong, asking for extraneous information may create an incentive for lying. (C) 2003 Elsevier Inc. All rights reserved.