Partial Language Competence

Jeanne Hagenbach and Frederic Koessler

No 13488, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper proposes an equilibrium concept, Language-Based Expectation Equilibrium, which accounts for partial language understanding in sender-receiver cheap talk games. Each player has a privately known language competence representing all the messages that he understands. For the messages he does not understand, he has correct but coarse expectations about the equilibrium strategies of the other player. In general, a language-based expectation equilibrium outcome differs from Nash and communication equilibrium outcomes, but is always a Bayesian solution. Partial language competence of the sender rationalizes information transmission and lies in pure persuasion problems, and facilitates information transmission from a moderately biased sender.

Keywords: Analogy-based expectations; Bayesian solution; Bounded rationality; Cheap talk; Language (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-gth and nep-mic
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Related works:
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
Working Paper: Partial Language Competence (2019)
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