Econometrica: May 2007, Volume 75, Issue 3
On the Limits of Communication in Multidimensional Cheap Talk: A Comment
Gilat Levy, Ronny Razin
We analyze a cheap talk game, à la Crawford and Sobel, in a multidimensional state and policy space. A feature of the multidimensional state space is that communication on one dimension often reveals information on others. We show how this feature imposes bounds on communication.
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On the Limits of Communication in Multidimensional Cheap Talk: Supplementary MaterialIn this Appendix we extend our results of the paper to a general family of single-peaked preferences (similar to those of Crawford and Sobel (1982), but adopted to the multidimensional state space). We show that when the conflict between the sender and the receiver is large, these preferences have similar characteristics to those of the lexicographic preferences analysed in the paper. We prove that communication is restricted in this environment as well.