Subversive Conversations∗
Subversive Conversations∗ Nemanja Antic,y Archishman Chakraborty,z Rick Harbaughx May 9, 2021 Abstract Two players with common interests exchange information to make a decision. Their communication is scrutinized by an observer with different interests who understands the meaning of all messages and may object to the decision. We show how the players can implement their ideal decision rule using a back and forth conversation. Such a subversive conversation reveals enough information for the players to determine their best decision, but not enough information for the observer to determine whether the decision was against his interest. Our results provide a theory of conversations based on deniability in the face of possible public outrage. JEL Classification: C72, D71, D72, D82. Keywords dispersed information, transparency, deniability, subversion, cheap talk, conver- sations. ∗We thank conference participants at the Australasian Public Choice Conference at QUT (2019), Junior Theory Workshop at U. Bonn (2019), Decentralization Conference at U. Michigan (2019), Stonybrook International Game Theory Conference (2019), UChicago-Northwestern Theory Conference (2019), and the Midwest Theory Conference (2019), and seminar participants at the Delhi School of Economics (2019), Monash University (2019), Northwestern University (2019), Queen Mary College (2019), Toulouse School of Economics (2019), University of Bath (2019), UCLA (2020), Norwegian Business School (2020), and University of Arizona (2021). For helpful comments, we also thank David Austen-Smith, Sandeep Baliga, Gabriel Carroll, Eddie Dekel, Wioletta Dziuda, Georgy Egorov, Jeff Ely, Tim Feddersen, Daniel Garrett, Parikshit Ghosh, Faruk Gul, Jason Hartline, Aaron Kolb, Marilyn Pease, Nicola Persico, Doron Ravid, Ludovic Renou, Patrick Rey, Ariel Rubinstein, Alvaro Sandroni, Joel Sobel, Lars Stole, Jean Tirole, Bilge Yilmaz and Bill Zame.
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