Abstract

Cheap talk has often been thought incapable of supporting the emergence of cooperation because costless signals, easily faked, are unlikely to be reliable (Zahavi and Zahavi, 1997). I show how, in a social network model of cheap talk with reinforcement learning, cheap talk does enable the emergence of cooperation, provided that individuals also temporally discount the past. This establishes one mechanism that suffices for moving a population of initially uncooperative individuals to a state of mutually beneficial cooperation even in the absence of formal institutions.