Abstract
We analyze the role of cheap-talk in two player games with one-sided incomplete information. We identify conditions under which (1) players can fully communicate and coordinate on efficient Nash equilibria of the underlying complete information game; and (2) players cannot communicate so cheap-talk does not alter the equilibrium set of the Bayesian game. We present examples that illustrate several issues that arise when there is two-sided incomplete information. Journal of Economic Literature Classification Numbers: C72, D82.
Original language | English (US) |
---|---|
Pages (from-to) | 450-468 |
Number of pages | 19 |
Journal | Journal of Economic Theory |
Volume | 105 |
Issue number | 2 |
DOIs | |
State | Published - Aug 2002 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
Keywords
- Bayesian equilibrium
- Cheap talk
- Incomplete information
- Nash equilibrium