Multidimentional Cheap Talk

Abstract

In this paper, we extend the cheap talk model of Crawford and Sobel (1982) to a multidimensional state space. We provide a characterization of informative equilibria. Most importantly, we prove for a generic family of distribution functions, that no information transmission is feasible when the conflict between the sender and the receiver is too large. Thus, adding more dimensions cannot improve upon information revelation when interests are too divergentCheap Talk