Cheap Talk is a term used in %20%20%20This%20article%20discusses%20the%20mathematical%20modelling%20of%20incentive%20structures.%20... Game Theory for pre-play communication which carries no cost. For example, in the %20%20%20%20%20%20Will%20the%20two%20prisoners%20cooperate%20to%20minimise%20total%20loss%20of%20liberty%20or%20will%20one%20of%20them%2C%20trusting%20the%20other%20to%20cooperate%2C%20betray%20him%20so%20as%20to%20go%20free%3F%20%20%20The%20prisoner%5Cs%20dilemma%20is%20a%20type%20of%20%20%20non-zero-sum%20%20%20game.%20... Prisoner's Dilemma one might add a round of pre-play communication where each player announces the action they intend to take (or alternatively the action they would like the other to take). In the %20%20%20%20%20%20Will%20the%20two%20prisoners%20cooperate%20to%20minimise%20total%20loss%20of%20liberty%20or%20will%20one%20of%20them%2C%20trusting%20the%20other%20to%20cooperate%2C%20betray%20him%20so%20as%20to%20go%20free%3F%20%20%20The%20prisoner%5Cs%20dilemma%20is%20a%20type%20of%20%20%20non-zero-sum%20%20%20game.%20... Prisoner's dilemma cheap talk is not expected to have any effect (for an exception see Robson 1990). In other games Cheap Talk does have a demonstrated effect on play.

Biological applications

It has been commonly argued that cheap talk will have no effect on the underlying structure of the game. In %20%20%20%20%20%20%20%20%20%20%20Biology%20is%20the%20%20%20science%20of%20%20%20life%20(from%20the%20%20%20Greek%20words%20bios%20%3D%20life%20and%20logos%20%3D%20reasoned%20account).%20... biology authors have often argued that costly signalling best explains signalling between animals (see %20%20%20The%20handicap%20theory%20is%20an%20idea%20proposed%20by%20the%20Israeli%20biologist%20Amotz%20Zahavi.%20... Handicap theory). This general belief has been receiving some challenges (see work by Carl Bergstrom (http://octavia.zoology.washington.edu/information_overview.html) and Brian Skyrms 2002, 2004). In particular, several models using %20%20%20Evolutionary%20game%20theory%20(EGT)%20is%20the%20application%20of%20game%20theory%20in%20evolutionary%20biology.%20... evolutionary game theory indicate that cheap talk can have effect on the evolutionary dynamics of particular games.

References

Robson, A.J. (1990) “Efficiency in Evolutionary Games: Darwin, Nash, and the Secret Handshake.” Journal of Theoretical Biology 144: 379-396.

Skyrms, B. (2002) “Signals, Evolution and the Explanatory Power of Transient Information.” Philosophy of Science 69: 407-228.

Skyrms, B. (2004) The Stag Hunt and the Evolution of Social Structure. New York: Cambridge University Press.