Abstract
The motivation for the paper is that, insofar as agents can inflict self-imposed utility losses, purely cheap talk communication is never the only available instrument for information transmission. Given this and the importance of recent work applying cheap talk models to understand a variety of political phenomena, we explore two related questions for the theory. First, what are the equilibrium implications for cheap talk communication when an informed agent is free to use both costless and costly signals and, second, what are the consequences of allowing both sorts of signal for the widespread use of ex ante welfare comparisons as a basis for predictions on the degree of information transmission or institutional choice?
| Original language | English (US) |
|---|---|
| Pages (from-to) | 263-280 |
| Number of pages | 18 |
| Journal | European Journal of Political Economy |
| Volume | 18 |
| Issue number | 2 |
| DOIs | |
| State | Published - 2002 |
Funding
The comments of the anonymous referees much improved this paper and the NSF kindly provided support under grant SBR-9804877. But more than anything, Austen-Smith thanks Jeffrey S. Banks for being his friend and colleague until the day he died.
Keywords
- Cheap talk
- Costly signaling
- Refinements
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations