This chapter analyzes a special class of signaling games where the sender faces costless messages. We examine whether separating PBEs can be sustained, where information is conveyed from the privately informed sender to the uninformed receiver; and whether pooling PBEs can be supported, where the sender conceals his private information from the receiver. We show that information transmission can occur (that is, a separating PBE can be sustained) if the preferences of sender and receiver are sufficiently aligned; otherwise no information transmission exists between the parties.
