Noisy talk

Andreas Blume, Oliver J. Board, Kohei Kawamura

Research output: Contribution to journalArticle

72 Citations (Scopus)

Abstract

We investigate strategic information transmission with communication error, or noise. Our main finding is that adding noise can improve welfare. With quadratic preferences-and a uniform Pipe distribution, welfare can be raised for almost every bias level by introducing a sufficiently small amount of noise. Furthermore, there eidsts a level of noise that makes it possible to achieve the best payoff that can be obtained by means of any communication device. As in the-model Without noise, equilibria are interval partitional; with noise, however, coding (the measure of the message space used by each interval of the equilibrium partition of the type space) becomes critically important.

Original languageEnglish
Pages (from-to)395-440
Number of pages46
JournalTheoretical Economics
Volume2
Issue number4
Publication statusPublished - 2007 Dec
Externally publishedYes

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Keywords

  • Cheap talk
  • Communication
  • Information transmission
  • Noise

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Blume, A., Board, O. J., & Kawamura, K. (2007). Noisy talk. Theoretical Economics, 2(4), 395-440.