Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2017

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Cheap Talk with Fixed Agenda

Elliot Lipnowski*, Doron Ravid

Last modified: 2017-04-18

Abstract


We study a model of cheap talk with one substantive assumption: the sender’s preferences are state-independent. Our key observation is that this setting is amenable to the belief-based approach familiar from models of persuasion with commitment. This approach allows us to assess the value of commitment, address several classic questions about cheap talk for the state-independent case, and explicitly solve for sender-optimal equilibria in a large class of examples. A key product is a geometric characterization of the value of cheap talk, described by the quasiconcave envelope of the sender’s indirect utility.