We incorporate semiotics into economic theory, modeling communication with an encoding-decoding step where the sender transmits a message that the receiver can understand if and only if a common natural language is used. We add an inferential step where the receiver may either believe the literal meaning or disregard it in updating priors. This prevents conflating encrypted and ordinary messages, eliminating informative equilibria where language is used arbitrarily. Unlike cheap and costly talk models, informative equilibria exist only if the senders’ payoffs improve relative to the uninformative equilibrium. In informative equilibria, natural language works as an equilibrium selection mechanism.
|Date of creation:||Feb 2011|
|Date of revision:||Mar 2014|
|Contact details of provider:|| Postal: |
Phone: (5411) 6314-3000
Fax: (5411) 4314-1654
Web page: http://www.cema.edu.ar/publicaciones/doc_trabajo.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
- Harsanyi, John C., 1994.
"Games with Incomplete Information,"
Nobel Prize in Economics documents
1994-1, Nobel Prize Committee.
- Crawford, Vincent P & Sobel, Joel, 1982.
"Strategic Information Transmission,"
Econometric Society, vol. 50(6), pages 1431-51, November.
- Joseph Farrell., 1986.
"Meaning and Credibility in Cheap-Talk Games,"
Economics Working Papers
8609, University of California at Berkeley.
- Farrell, Joseph, 1986. "Meaning and Credibility in Cheap-Talk Games," Department of Economics, Working Paper Series qt4968n3fz, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- J. Farrell, 2010. "Meaning and Credibility in Cheap Talk Games," Levine's Working Paper Archive 533, David K. Levine.
- Elinor Ostrom, 2010.
"Beyond Markets and States: Polycentric Governance of Complex Economic Systems,"
American Economic Review,
American Economic Association, vol. 100(3), pages 641-72, June.
- Ostrom, Elinor, 2009. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," Nobel Prize in Economics documents 2009-4, Nobel Prize Committee.
- Coase, R H, 1976. "Adam Smith's Views of Man," Journal of Law and Economics, University of Chicago Press, vol. 19(3), pages 529-46, October.
- A. Rubinstein, 1999.
"Economics and Language,"
Princeton Economic Theory Papers
00s6, Economics Department, Princeton University.
- Rubinstein,Ariel, 2000. "Economics and Language," Cambridge Books, Cambridge University Press, number 9780521593069.
- Ariel Rubinstein, 2000. "Economics and Language," Online economics textbooks, SUNY-Oswego, Department of Economics, number lang1.
- Rubinstein,Ariel, 2000. "Economics and Language," Cambridge Books, Cambridge University Press, number 9780521789905.
- repec:oup:restud:v:76:y:2009:i:4:p:1359-1395 is not listed on IDEAS
- Ken Binmore, 1994. "Game Theory and the Social Contract, Volume 1: Playing Fair," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262023636, June.
- Hefei Wang, 2009. "Reputation acquisition of underwriter analysts - Theory and evidence," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 331-363, November.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Robert J. Leonard, 1992. "Reading Cournot, Reading Nash / or / The Emergence and Stabilization of the Nash equilibrium," Cahiers de recherche du Département des sciences économiques, UQAM 9214, Université du Québec à Montréal, Département des sciences économiques.
- Navin Kartik, 2008.
"Strategic Communication with Lying Costs,"
2008 Meeting Papers
350, Society for Economic Dynamics.
- McNollgast, 2007. "The Political Economy of Law," Handbook of Law and Economics, Elsevier.
- repec:cup:cbooks:9780521555838 is not listed on IDEAS
- Callander, Steven & Wilkie, Simon, 2007. "Lies, damned lies, and political campaigns," Games and Economic Behavior, Elsevier, vol. 60(2), pages 262-286, August.
When requesting a correction, please mention this item's handle: RePEc:cem:doctra:443. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valeria Dowding)
If references are entirely missing, you can add them using this form.