Published and Forthcoming We study a model of cheap talk with one substantive assumption: The sender’s preferences are stateindependent. Our main observation is that such a sender gains credibility by garbling selfserving information. Using this observation, we examine the possibility of valuable communication, assess the value of commitment, and explicitly solve for senderoptimal equilibria in several examples. A key result is a geometric characterization of the value of cheap talk, described by the quasiconcave envelope of the sender’s value function. Working Papers This paper analyzes a bilateral trade model where the buyer's valuation for the object is uncertain and she can privately purchase any signal about her valuation. The seller makes a takeitorleaveit offer to the buyer. The cost of a signal is smooth and increasing in informativeness. We characterize the set of equilibria when learning is free and show that they are strongly Pareto ranked. Our main result is that, when learning is costly but the cost of information goes to zero, equilibria converge to the worst freelearning equilibrium. A seller bargains with a rationally inattentive buyer (Sims, 2003) over a good of random quality. After observing quality, the seller makes a takeitorleaveit offer. The buyer pays attention to the seller's product and offer at a cost proportional to expected entropy reduction. Because attention is free offpath, multiple equilibria emerge, many of which are efficient. A tremblinghandlike refinement (Selten, 1975) rules out efficiency, delivering complete disagreement when attention is expensive and a unique equilibrium with trade when attention is cheap. In this equilibrium, the buyer overpays for lowquality goods, underpays for highquality goods, and earns a strictly positive payoff.
A sender commissions a study to persuade a receiver, but influences the report with some statedependent probability. We show that increasing this probability can benefit the receiver and can lead to a discontinuous drop in the sender's payoffs. We also examine a publicpersuasion setting, where we show the sender especially prefers her report to be immune to influence in bad states. To derive our results, we geometrically characterize the sender's highest equilibrium payoff, which is based on the concave envelope of her capped value function.
We study a static selfcontrol model in which an agent's preference, temptation ranking, and cost of selfcontrol drive her choices among a finite set of options. We show that it is without loss to assume that the agent's temptation ranking is the opposite of her preference. We characterize the model by relaxing the Weak Axiom of Revealed Preference (WARP), and exploit WARP violations to identify the model's parameters.We study the following random choice procedure. First, the agent focuses on an option at random from the set of available options. Then, she compares the focal option to each other available alternative. Comparisons are binary, random and independent of each other. The agent chooses the focal option if it passes all comparisons favorably. Otherwise, the agent draws a new focal option with replacement. We characterize the procedure's revealed preference implications, show that it accommodates the Attraction effect and Choice overload, and discuss how to conduct welfare comparisons. We conclude by showing that while utility maximization is the procedure's unique deterministic special case, nearly deterministic versions of the procedure can exhibit context effects.
