Competitive cheap talk

This paper studies a competitive cheap talk model with two senders. Each sender, who is responsible for a single project, only observes the return of his own project. Exactly one project will be implemented. Both senders share some common interests with the receiver, but at the same time have own project biases. Under simultaneous communication, all equilibria are shown to be partition equilibria, but where all the equilibria can no longer be ranked ex ante in terms of their Pareto effi ciency. In the equilibrium preferred by the principal, the agent with a smaller bias always has veto power to determine which alternative is implemented and weakly more messages. In any given equilibrium, decreasing the own-project bias of one agent improves the precision of communication by both agents, making the communication strategies of the two agents intimately related. Finally, sequential communication and simple delegation are shown to be equivalent to simultaneous communication in terms of the obtainable set of mappings from the agents’private information to the implemented project. JEL Classification Numbers: D23, D74, D82