Complexity versus conflict in communication

Equilibrium models of costless strategic communication provide four insights, which can be summarized informally by: failure to communicate is always possible; perfect communication is not possible when conflict of interest exists between the informed Sender and the uninformed Receiver; whenever non-trivial communication is possible, there are multiple equilibrium outcomes; the quality of information communicated in equilibrium and the potential benefits of communication increase when the conflict between the Sender and Receiver decreases. I will review these insights and point out that parallel properties emerge in a new model of strategic communication when the Sender and Receiver must make costly investments that determine their abilities to encode and decode (respectively) messages. That is, there is a parallel foundation to the economic theory of strategic communication in which the reason for limited communication is complexity rather than conflicting interests.