Partial Language Competence

30 Pages Posted: 28 Jan 2019

See all articles by Jeanne Hagenbach

Jeanne Hagenbach

University of Paris-Saclay - Ecole Polytechnique

Frédéric Koessler

University of Cergy-Pontoise - THEMA

Date Written: January 2019

Abstract

This paper proposes an equilibrium concept, Language-Based Expectation Equilibrium, which accounts for partial language understanding in sender-receiver cheap talk games. Each player has a privately known language competence representing all the messages that he understands. For the messages he does not understand, he has correct but coarse expectations about the equilibrium strategies of the other player. In general, a language-based expectation equilibrium outcome differs from Nash and communication equilibrium outcomes, but is always a Bayesian solution. Partial language competence of the sender rationalizes information transmission and lies in pure persuasion problems, and facilitates information transmission from a moderately biased sender.

Keywords: analogy-based expectations, Bayesian solution, bounded rationality, cheap talk, Language

JEL Classification: C72, D82

Suggested Citation

Hagenbach, Jeanne and Koessler, Frédéric, Partial Language Competence (January 2019). Available at SSRN: https://ssrn.com/abstract=3324223

Jeanne Hagenbach (Contact Author)

University of Paris-Saclay - Ecole Polytechnique

Frédéric Koessler

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011
France

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