Competitive cheap talk

We study a competitive cheap talk model with two senders. Each sender is responsible for a single project and observes its return. Exactly one project will be implemented. Both senders share some common interests with the principal, but have own-project biases. Under simultaneous communication, all equilibria are shown to be partition equilibria, but all the equilibria can no longer be ranked ex ante in terms of Pareto efficiency. The payoff of the principal depends on both the total conflict between the agents and the asymmetry in the own-project biases. 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. Finally, sequential communication and simple delegation are shown to be essentially outcome-equivalent to simultaneous communication. (C) 2016 Elsevier Inc. All rights reserved.