Strategic Communication with Cost-Dependent Decoders via the Gray-Wyner Network

Abstract

In decentralized decision-making problems, communicating agents choose their actions based on locally available information and knowledge about decision rules or strategies of other agents. In this work, we consider a strategic communication game between an informed encoder and two decoders communicating via a Gray-Wyner network. All three agents are assumed to be rational and endowed with distinct objectives captured by non-aligned cost functions. The encoder selects and announces beforehand the compression scheme to be implemented. Then, it transmits three signals: a public signal, and a private signal to each decoder inducing a Bayesian game among the decoders. Our goal is to characterize the encoder's minimal long-run cost function subject to the optimal compression scheme that satisfies both decoders incentives constraints.