Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150102
Title: 
Authors: 
Board, Oliver J.
Blume, Andreas
Kawamura, Kohei
Year of Publication: 
2007
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 2 [Year:] 2007 [Issue:] 4 [Pages:] 395-440
Abstract: 
We investigate strategic information transmission with communication error, or noise. Our main finding is that adding noise can improve welfare. With quadratic preferences and a uniform type distribution, welfare can be raised for almost every bias level by introducing a sufficiently small amount of noise. Furthermore, there exists a level of noise that makes it possible to achieve the best payoff that can be obtained by means of any communication device. As in the model without noise, equilibria are interval partitional; with noise, however, coding (the measure of the message space used by each interval of the equilibrium partition of the type space) becomes critically important.
Subjects: 
Communication
information transmission
cheap talk
noise
JEL: 
C72
D82
D83
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0
Document Type: 
Article

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