Long Cheap Talk

Robert J. Aumann and Sergiu Hart



(Acrobat PDF file)



Abstract
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