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Cheap Talk and Burned Money

Austen-Smith, David and Banks, Jeffrey S. (2000) Cheap Talk and Burned Money. Journal of Economic Theory, 91 (1). pp. 1-16. ISSN 0022-0531. doi:10.1006/jeth.1999.2591.

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We augment the standard Crawford–Sobel (1982, Econometrica 50, 1431–1451) model of cheap talk communication by allowing the informed party to use both costless and costly messages. The issues on which we focus are the consequences for cheap talk signaling of the option to burn money and the circumstances under which both cheap talk and burned money are used to signal information.

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Additional Information:© 2000 by Academic Press. Received July 14, 1995; revised August 30, 1999. We are grateful to the referees and an associate editor for useful comments on an earlier version of the paper. Austen-Smith is also grateful to the NSF for support under Grant SBR-9804877.
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Issue or Number:1
Classification Code:Classification Numbers: C7, D8.
Record Number:CaltechAUTHORS:20160524-104604366
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Official Citation:David Austen-Smith, Jeffrey S. Banks, Cheap Talk and Burned Money, Journal of Economic Theory, Volume 91, Issue 1, March 2000, Pages 1-16, ISSN 0022-0531, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:67301
Deposited By: Ruth Sustaita
Deposited On:24 May 2016 18:35
Last Modified:11 Nov 2021 00:30

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