Issues in Economic Systems and Institutions: Communication
Main readings:
- Vincent Crawford and Joel Sobel (1982): “Strategic Information Transmission.” Econometrica, 50(6), 1431-51.
- Marco Battaglini (2003): “Multiple Referrals and Multidimensional Cheap Talk.” Econometrica, 70(4), 1379 – 1401.
- Wouter Dessein (2002): “Authority and Communication in Organizations.” Review of Economic Studies, 69, 811 – 838.
- Rick Harbaugh and Theodore To (2006): “False Modesty: When Disclosing Good News Looks Bad.” Mimeo, Kelley School of Business, Indiana University.
- Paul Milgrom and John Roberts (1986): “Relying on the Information of Interested Parties.” Bell Journal of Economics, 17(1), 18 – 32.
Supplementary Readings:
Here are two useful review articles on the theory of cheap talk:
- Joseph Farrell and Matthew Rabin (1996): “Cheap Talk.” Journal of Economic Perspectives, 10(3), 103-118.
- Joel Sobel (2013): “Giving and Receiving Advice.” in D. Acemoglu, M. Arellano and E. Dekel (eds) Advances in Economics and Econometrics.
If you want to see some economic applications of the abstract theory, here are some papers:
- Jeremy Stein (1989): “Cheap Talk and the Fed: A Theory of Imprecise Policy Announcements.” American Economic Review, 79(1), 32-42.
- John Morgan and Phillip Stocken (2003): “An Analysis of Stock Recommendations.” RAND Journal of Economics, 34(1), 183-203.
- Sandeep Baliga and Thomas Sjostrom: “Arms Races and Negotiations.” Review of Economic Studies, 71(2), 351-369.
A famous essay and a philosophical discussion on vagueness and ambiguity in language (Orwell is an easy read):
- George Orwell: “Politics and the English Language.”
- Richard Stalnaker: “Saying and Meaning, Cheap Talk and Credibility.”
Two video links on a related theme – the use and abuse of euphemisms: