Cheap Talk With Transparent Motives
Econometrica · 2020 · Volume 88 · Issue 4
Abstract
We study a model of cheap talk with one substantive assumption: The sender's preferences are state independent. Our main observation is that such a sender gains credibility by degrading self-serving information. Using this observation, we examine the sender's benefits from communication, assess the value of commitment, and explicitly solve for sender-optimal equilibria in three examples. A key result is a geometric characterization of the value of cheap talk, described by thequasiconcave envelope of the sender's value function.
Keywords
Cheap talk, belief-based approach, securability, quasiconcave envelope, persuasion, information transmission, information design
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