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Go Figure: The Strategy of Nonliteral Speech

Author

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  • Hugo M. Mialon
  • Sue H. Mialon

Abstract

We develop a model of figurative or indirect speech, which may convey a meaning that differs from its literal meaning. The model yields analytical conditions for speech to be figurative in equilibrium and delivers a number of comparative statics results. For instance, it predicts that the likelihood of figurative speech is greater if the benefit to the listener of correctly understanding the speaker is greater. We then apply the model to analyze particular forms of indirect speech, including terseness, irony, and veiled bribery. Interestingly, the model provides a novel argument for the effectiveness of laws that strictly punish attempted bribery. (JEL D83, K42, Z13)

Suggested Citation

  • Hugo M. Mialon & Sue H. Mialon, 2013. "Go Figure: The Strategy of Nonliteral Speech," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 186-212, May.
    • Handle: RePEc:aea:aejmic:v:5:y:2013:i:2:p:186-212
    Note: DOI: 10.1257/mic.5.2.186
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    References listed on IDEAS

    as
    1. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    2. Johanna Hertel & John Smith, 2013. "Not so cheap talk: costly and discrete communication," Theory and Decision, Springer, vol. 75(2), pages 267-291, August.
    3. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    4. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    5. Farrell Joseph, 1993. "Meaning and Credibility in Cheap-Talk Games," Games and Economic Behavior, Elsevier, vol. 5(4), pages 514-531, October.
    6. Oecd & Nea, 2010. "Case Law," Nuclear Law Bulletin, OECD Publishing, vol. 2010(1), pages 93-102.
    7. Vincent P. Crawford, 2003. "Lying for Strategic Advantage: Rational and Boundedly Rational Misrepresentation of Intentions," American Economic Review, American Economic Association, vol. 93(1), pages 133-149, March.
    8. , & ,, 2006. "A study in the pragmatics of persuasion: a game theoretical approach," Theoretical Economics, Econometric Society, vol. 1(4), pages 395-410, December.
    9. Oecd & Nea, 2011. "Case Law," Nuclear Law Bulletin, OECD Publishing, vol. 2010(2), pages 67-73.
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    Cited by:

    1. Blume, Andreas & Lai, Ernest K. & Lim, Wooyoung, 2019. "Eliciting private information with noise: The case of randomized response," Games and Economic Behavior, Elsevier, vol. 113(C), pages 356-380.
    2. Johanna Hertel & John Smith, 2013. "Not so cheap talk: costly and discrete communication," Theory and Decision, Springer, vol. 75(2), pages 267-291, August.

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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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