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Cheap talk with an exit option: The case of discrete action space

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  • Shimizu, Takashi

Abstract

We consider a cheap talk model with the sender’s exit option. We show that in the case of discrete action space, it can be the case that there exists an informative equilibrium if and only if the sender’s bias is sufficiently small or sufficiently large. The latter case is sharply contrasting with the existing results of cheap talk.

Suggested Citation

  • Shimizu, Takashi, 2013. "Cheap talk with an exit option: The case of discrete action space," Economics Letters, Elsevier, vol. 120(3), pages 397-400.
    • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:397-400
    DOI: 10.1016/j.econlet.2013.04.023
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    References listed on IDEAS

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    1. Yeon-Koo Che & Navin Kartik, 2009. "Opinions as Incentives," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 815-860, October.
    2. Saori Chiba & Kaiwen Leong & Kaiwen Leong, 2013. "Cheap Talk with Outside Options," Working Papers 16, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    3. Robert Gibbons & Niko Matouschek & John Roberts, 2012. "Decisions in Organizations [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    4. Hori, Kazumi, 2008. "The role of private benefits in information acquisition," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 626-631, December.
    5. Robert Gibbons & John Roberts, 2012. "The Handbook of Organizational Economics," Economics Books, Princeton University Press, edition 1, volume 1, number 9889.
    6. Abhijit Banerjee & Rohini Somanathan, 2001. "A Simple Model of Voice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 189-227.
    7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    Citations

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    Cited by:

    1. Sémirat, S. & Forges, F., 2021. "Strategic information transmission with sender's approval: the single-crossing case," Working Papers 2021-03, Grenoble Applied Economics Laboratory (GAEL).
    2. Françoise Forges & Jérôme Renault, 2021. "Strategic information transmission with sender’s approval," International Journal of Game Theory, Springer;Game Theory Society, vol. 50(2), pages 475-502, June.
    3. Stéphan Sémirat & Françoise Forges, 2022. "Strategic information transmission with sender’s approval: the single crossing case," Post-Print hal-03231673, HAL.
    4. Takashi Shimizu, 2017. "Cheap talk with an exit option: a model of exit and voice," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1071-1088, November.
    5. Saori Chiba, 2024. "Information Transmission and Countervailing Biases in Organizations," Games, MDPI, vol. 15(3), pages 1-25, May.
    6. Stéphan Sémirat & Françoise Forges, 2021. "Strategic information transmission with sender’s approval: the single crossing case," Working Papers hal-03231673, HAL.
    7. Saori Chiba & Kaiwen Leong, 2013. "Managerial Economics of Cheap Talk," Working Papers 24, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.
    8. Sémirat, Stéphan & Forges, Françoise, 2022. "Strategic information transmission with sender's approval: The single-crossing case," Games and Economic Behavior, Elsevier, vol. 134(C), pages 242-263.
    9. Françoise Forges & Jérôme Renault, 2020. "Strategic information transmission with sender's approval," Working Papers hal-02440627, HAL.

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    More about this item

    Keywords

    Cheap talk; Exit; Bias; Informativeness;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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