Cheap talk communication with dynamic information searching

Abstract

We build an agent-based cheap talk communication model with dynamic information searching behavior. In this model, agent communicates with its neighbors freely to get true or false information. Moreover, the uninformed receivers has ability to break up one link of his neighbor who is considered as a dishonest sender and searches for a new neighbor in the market. We study the impacts of the accuracy of information, the number of neighbors and the percentage of relinking neighbors on the information identification of uninformed receivers. The results suggest that the effect of the accuracy of information and the number of neighbors on information identification is linear, but the effect of the percentage of relinking neighbors presents a first increasing and then decreasing trend.