Skip to main content
eScholarship
Open Access Publications from the University of California

Selecting cheap-talk equilibria

  • Author(s): Kartik, Navin
  • Sobel, Joel
  • Chen, Ying
  • et al.
Abstract

There are typically multiple equilibrium outcomes in the Crawford-Sobel (CS) model of strategic information transmission. This paper identifies a simple condition on equilibrium payoffs, called NITS (no incentive to separate), that selects among CS equilibria. Under a commonly used regularity condition, only the equilibrium with the maximal number of induced actions satisfies NITS. We discuss various justifications for NITS, including perturbed cheap-talk games with nonstrategic players or costly lying. We also apply NITS to other models of cheap talk, illustrating its potential beyond the CS framework.

Many UC-authored scholarly publications are freely available on this site because of the UC's open access policies. Let us know how this access is important for you.

Main Content
Current View