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Published March 2000 | public
Journal Article

Cheap Talk and Burned Money


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.

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.

Additional details

August 19, 2023
October 18, 2023