Rumors vs. Announcement
Let’s model a rumor…
1.
2.
3.
4.
Three players
Government is corrupt with probability q
With probability r, someone finds out
With probability s, someone who finds out,
tells another
What is the information structure?
Hint, to represent information structure with
three players, you can split the balls like this:
Suppose the three players play a variation of the
coordination game:
If all three revolt, get 1
If revolt and anyone else did not, get -1
If don’t revolt, get 0
Can they revolt iff they find out?
Key insight: rumors are private information, so
can’t coordinate on them
Applications…