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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

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Vagueness of Language: Indeterminacy under Two-Dimensional State-Uncertainty

Saori ChibaORCID iD: https://orcid.org/0000-0003-3091-3583
Published Online: 2019-10-22 | DOI: https://doi.org/10.1515/bejte-2018-0093


We study indeterminacy of indicative meanings (disagreements about meanings of messages among players), a kind of language vagueness examined in Blume and Board (2013. “Language Barriers.” Econometrica 81 (2): 781–812). They, using a cheap talk model in which the state-distribution and the players’ language competence were ex-ante uncertain, demonstrated that this vagueness occurs as an equilibrium language. We expand the work of Blume and Board by using a model between an uninformed decision maker and an informed agent in which the state-distribution and the state are both ex-ante uncertain. We show that this two-dimensional uncertainty also leads to indeterminacy of indicative meanings, that is, to a set of conditions in which an agent with different perceptions of the state-distribution intentionally uses the same symbol for the different extents of information on the state. The vagueness, contrary to common expectations, can actually lead to welfare improvement.

Keywords: information; language; state-uncertainty; vagueness

JEL Classification: D82; D83; M14


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About the article

Published Online: 2019-10-22

Citation Information: The B.E. Journal of Theoretical Economics, Volume 20, Issue 1, 20180093, ISSN (Online) 1935-1704, DOI: https://doi.org/10.1515/bejte-2018-0093.

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