When Words are not Enough

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)
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Communication through ordinary talk is very common. Often, the receiver of information has the option to investigate a sender’s type. We extend a standard cheap-talk model by giving the receiver this option. We show that when the receiver bears most of the investigation cost, the option to investigate drives away most cheap-talk communication. When the sender pays a substantial part of the investigation cost, the option to investigate disciplines the sender. Introducing an investigation device to a cheap-talk model demonstrates the vulnerability of cheap talk on the one hand, and shows how communication can be improved on the other.
Original languageEnglish
Pages (from-to)294-314
Number of pages21
JournalJournal of Economic Behavior and Organization
Publication statusPublished - 16 Apr 2018


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