Alternating-announcements cheap talk

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6 Citations (Scopus)

Abstract

We model alternating-announcements cheap talk, while discussing the efficiency consequences of explicitly allowing the 'no-agreement' outcome of the game with communication to vary with players' cheap talk announcements. Our results give further consistency to the argument that a cheap talk extension does not necessarily imply efficiency in the play of the original game. Moreover, we characterize the extent of such inefficiency, and show it to be similar to that obtained by Rabin [Rabin, M., 1994. Journal of Economic Theory 63, 370-391], despite the strategic incentives driving our results differing from Rabin's. We also show that efficiency is obtained when the history of alternating announcements is ignored when an agreement is not reached.

Original languageEnglish
Pages (from-to)405-416
Number of pages12
JournalJournal Of Economic Behavior & Organization
Volume42
Issue number3
DOIs
Publication statusPublished - Jul 2000

Keywords

  • Pre-game communication
  • Cheap talk

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