Cheap Talk with Transparent Motives
43 Pages
Posted: 29 Mar 2017
Last revised: 13 Sep 2017
University of Chicago - Department of Economics
University of Chicago - Department of Economics
Date Written: September 11, 2017
Abstract
We study a model of cheap talk with one substantive assumption: the sender's preferences are state-independent. We observe that this setting is amenable to the belief-based approach familiar from models of persuasion with commitment. Using this approach, we examine the possibility of valuable communication, assess the value of commitment, and explicitly solve for sender-optimal equilibria in a large class of examples. A key result is a geometric characterization of the value of cheap talk, described by the quasiconcave envelope of the sender's value function.
Keywords: cheap talk, belief-based approach, securability, quasiconcave envelope, persuasion, information transmission, information design
JEL Classification: D83, D82, M37, D86, D72
Suggested Citation:
Suggested Citation
Lipnowski, Elliot and Ravid, Doron, Cheap Talk with Transparent Motives (September 11, 2017). Available at SSRN: https://ssrn.com/abstract=2941601 or http://dx.doi.org/10.2139/ssrn.2941601
