Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Cheap Talk
Journal of Economic Perspectives
vol. 10,
no. 3, Summer 1996
(pp. 103–118)
(Complimentary)
Abstract
Economists often ask how private information is shared through markets, costly signaling, and other mechanisms. Yet most information sharing is done through ordinary, informal talk. Economists are inconsistent in their view of such 'cheap talk': sometimes it is supposed that communication generally leads to efficient equilibria; other times it is supposed that since 'talk is cheap,' it is never credible. The authors think both views are wrong. In this paper, they describe what some recent research in game theory teaches about when people will convey private information by cheap talk.Citation
Farrell, Joseph, and Matthew Rabin. 1996. "Cheap Talk." Journal of Economic Perspectives, 10 (3): 103–118. DOI: 10.1257/jep.10.3.103JEL Classification
- D82 Asymmetric and Private Information
- D83 Search; Learning; Information and Knowledge; Communication; Belief
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