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Cheap talk
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<p>In <a href="/facts/Game_theory/zkEIj1ya">game theory</a>, cheap talk is communication between players that does not directly affect the payoffs of the game. Providing and receiving information is free. This is in contrast to <a href="/facts/Signalling_(economics)/6q3hzaT0">signalling</a>, in which sending certain messages may be costly for the sender depending on the state of the world. </p><p>This basic setting set by <a href="/facts/Vincent_Crawford/hw75K5s3">Vincent Crawford</a> and <a href="/facts/Joel_Sobel/eCeImbMo">Joel Sobel</a> has given rise to a variety of variants. </p><p>To give a formal definition, cheap talk is communication that is: </p> <ol><li>costless to transmit and receive</li> <li>non-binding (i.e. does not limit strategic choices by either party)</li> <li>unverifiable (i.e. cannot be verified by a third party like a court)</li></ol> <p>Therefore, an agent engaging in cheap talk could lie with impunity, but may choose in equilibrium not to do so. </p>