Costly signaling and cheap talk in models of political influence

Abstract

The motivation for the paper is that, insofar as agents can inflict self-imposed utility losses, purely cheap talk communication is never the only available instrument for information transmission. Given this and the importance of recent work applying cheap talk models to understand a variety of political phenomena, we explore two related questions for the theory. First, what are the equilibrium implications for cheap talk communication when an informed agent is free to use both costless and costly signals and, second, what are the consequences of allowing both sorts of signal for the widespread use of ex ante welfare comparisons as a basis for predictions on the degree of information transmission or institutional choice?