Co-ordination, spillovers, and cheap talk

Sandeep Baliga; Stephen Morris

doi:10.1006/jeth.2001.2855

Co-ordination, spillovers, and cheap talk

Sandeep Baliga
, Stephen Morris

Research output: Contribution to journal › Article › peer-review

46 Scopus citations

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	https://doi.org/10.1006/jeth.2001.2855
State	Published - Aug 2002

All Science Journal Classification (ASJC) codes

Economics and Econometrics

Keywords

Bayesian equilibrium
Cheap talk
Incomplete information
Nash equilibrium

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10.1006/jeth.2001.2855

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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.",

keywords = "Bayesian equilibrium, Cheap talk, Incomplete information, Nash equilibrium",

author = "Sandeep Baliga and Stephen Morris",

note = "Funding Information: 1We thank seminar participants at Brown, Columbia, Tel Aviv, and Washington Universities. An associate editor and a referee provided useful comments. We also thank V. Bhaskar for valuable discussions and Steve Matthews for pointing out an error in an earlier version. Any remaining errors are our responsibility. Morris is grateful for financial support from the Alfred P. Sloan Foundation and NSF Grant 9709601.",

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AU - Morris, Stephen

N1 - Funding Information: 1We thank seminar participants at Brown, Columbia, Tel Aviv, and Washington Universities. An associate editor and a referee provided useful comments. We also thank V. Bhaskar for valuable discussions and Steve Matthews for pointing out an error in an earlier version. Any remaining errors are our responsibility. Morris is grateful for financial support from the Alfred P. Sloan Foundation and NSF Grant 9709601.

PY - 2002/8

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N2 - 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.

AB - 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.

KW - Bayesian equilibrium

KW - Cheap talk

KW - Incomplete information

KW - Nash equilibrium

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EP - 468

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JF - Journal of Economic Theory

IS - 2

ER -

Co-ordination, spillovers, and cheap talk

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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