Long Cheap Talk

Robert J. Aumann and Sergiu Hart

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With cheap talk, more can be achieved by long conversations than by a single message -- even when one side is strictly better informed than the other. ("Cheap talk" means plain conversation -- unmediated, non-binding, and payoff-irrelevant.) This work characterizes the equilibrium payoffs for all two-person games in which one side is better informed than the other and cheap talk is permitted.

Keywords: cheap talk, communication, long conversation, incomplete information, game theory, signalling, joint lottery, dimartingale, di-span