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

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.

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Year of publication:	2013
Authors:	Shimizu, Takashi
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 3, p. 397-400
Publisher:	Elsevier
Subject:	Cheap talk \| Exit \| Bias \| Informativeness

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Type of publication:	Article
Classification:	D23 - Organizational Behavior; Transaction Costs; Property Rights ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010681783