In Crawford and Sobel (1982) (CS), a sender (S) uses cheap talk to persuade a receiver (R) to select an action as profitable to S as possible. This paper shows that the presence of an outside option – that is, allowing R to avoid taking any action, yielding state-independent reservation...

A decision maker (DM) must choose between two projects or decide on no project. The expected benefits of these projects are correlated. The DM seeks advice from an agent with private information about the projects' benefits. However, the agent's divergent preferences for projects and lack of...