An Extension on the Standard Cheap-talk model of Crawford and Sobel

This paper examines a variation on the standard cheap-talk model of Crawford and Sobel. In Crawford and Sobel, the sender knows his type exactly. However, I make the extension that the sender does not know his type exactly. The sender first needs to collect information about his type, which could be done through determination in which interval his type lies, where an additional interval costs c ≥ 0. So, the sender knows his type more precisely, if he adds more intervals. The main result that emerges from my model is that the sender does not take a lot of information, because less information improves communication. This is in line with the finding that the sender is less tempted to exaggerate with less information.