Published in:Serie Documentos de Trabajo UCEMA ; No. 443 (Revised September 2013)
Extent:
1 Online-Ressource (41 p)
Language:
English
DOI:
10.2139/ssrn.1776062
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 2011 erstellt
Description:
Natural language is a shared social convention that allows hearers to understand speakers. We model this using two steps. First, an encoding-decoding step where the sender transmits verbal information to the receiver. Second, an inferential step where the receiver may either believe the literal meaning of the message or disregard it in updating priors. These epistemic steps sharply restrict the beliefs that may be entertained on and off the equilibrium path. When there are credible messages, natural language is a powerful means to select equilibria