Simple Communication

Abstract

We study multidimensional cheap talk with simple language and aligned preferences. An expert communicates with a decision-maker using a score that aggregates a multidimensional state into a one-dimensional message. Even though the expert and the decision-maker share the same payoffs, the use of simple language introduces strategic frictions. Under quadratic-loss utility, any equilibrium score must be linear in the state or a coarsening of a linear score. As a result, equilibrium payoffs are lower than those achievable under commitment to a score. Finally, for normally distributed states, we characterize the equilibrium linear scores and show they correspond to the ex-ante best and worst linear scores.