Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/84444
Authors: 
Streb, Jorge M.
Torrens, Gustavo
Year of Publication: 
2011
Series/Report no.: 
Serie Documentos de Trabajo, Universidad del CEMA: Área: economía y linguística 443
Abstract: 
In economics, the standard approach to language is that talk is cheap. Here, instead, language is a social convention that affects utility. Unless language is used in its ordinary sense, it cannot help to coordinate actions because there is no way of decoding it. This points to a unique informative equilibrium where words are used in their ordinary sense in natural language. Misrepresentation costs may eliminate uninformative, babbling, equilibria. More generally, meaningful talk provides a concrete mechanism through which consistent expectations are generated in Nash equilibria.
Subjects: 
cheap talk
symbols
meaning
encoding-decoding
common priors
Nash equilibria
JEL: 
D8
C7
Document Type: 
Working Paper

Files in This Item:
File
Size
348.64 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.