Cheap Talk

Joseph Farrell () and Matthew Rabin

Journal of Economic Perspectives, 1996, vol. 10, issue 3, 103-118

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.

JEL-codes: D82 D83 (search for similar items in EconPapers)
Date: 1996
Note: DOI: 10.1257/jep.10.3.103
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Citations: View citations in EconPapers (429)

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