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Checking Cheap Talk

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  • Ian Ball
  • Xin Gao

Abstract

We consider a sender--receiver game in which the state is multidimensional and the receiver's action is binary. The sender always prefers the same action. The receiver can select one dimension of the state to verify. Despite the extreme conflict of interest, costless communication can be influential. We identify a class of symmetric equilibria in which the sender's message reveals which dimensions of the state are highest, and the receiver selects one of these dimensions to check. Using this construction, we characterize whether the sender benefits from communication. Similar equilibria exist when the receiver can check multiple dimensions.

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  • Ian Ball & Xin Gao, 2025. "Checking Cheap Talk," Papers 2501.09875, arXiv.org.
    • Handle: RePEc:arx:papers:2501.09875
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    File URL: http://arxiv.org/pdf/2501.09875
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    References listed on IDEAS

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    1. Bijkerk, Suzanne H. & Karamychev, Vladimir & Swank, Otto H., 2018. "When words are not enough," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 294-314.
    2. , & ,, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
    3. 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.
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