Cheap Talk and Burned Money

David Austen-Smith*, Jeffrey S. Banks

*Corresponding author for this work

Research output: Contribution to journalArticle

54 Scopus citations

Abstract

We augment the standard Crawford-Sobel (1982, Econometrica50, 1431-1451) model of cheap talk communication by allowing the informed party to use both costless and costly messages. The issues on which we focus are the consequences for cheap talk signaling of the option to burn money and the circumstances under which both cheap talk and burned money are used to signal information. Journal of Economic Literature Classification Numbers: C7, D8.

Original languageEnglish (US)
Pages (from-to)1-16
Number of pages16
JournalJournal of Economic Theory
Volume91
Issue number1
DOIs
StatePublished - Mar 1 2000

ASJC Scopus subject areas

  • Economics and Econometrics

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