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Well‐Informed Intermediaries In Strategic Communication

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  • WEI LI

Abstract

A privately informed sender may influence the decision maker through an intermediary who is better informed than him. I assume that the objective sender and intermediary pass on their best information, while the biased ones prefer a particular action but also have reputational concerns. I show that the biased intermediary selectively incorporates the sender's information to push his agenda, and his truth‐telling incentives always decrease in those of the biased sender. Hence, measures making it more costly for the sender to lie worsen the biased intermediary's distortion, and may make the decision maker strictly worse off. (JEL C70, D82, M31)

Suggested Citation

  • Wei Li, 2012. "Well‐Informed Intermediaries In Strategic Communication," Economic Inquiry, Western Economic Association International, vol. 50(2), pages 380-398, April.
    • Handle: RePEc:bla:ecinqu:v:50:y:2012:i:2:p:380-398
    DOI: j.1465-7295.2010.00306.x
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    References listed on IDEAS

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    1. Gilat Levy, 2007. "Decision Making in Committees: Transparency, Reputation, and Voting Rules," American Economic Review, American Economic Association, vol. 97(1), pages 150-168, March.
    2. Andrea Prat, 2005. "The Wrong Kind of Transparency," American Economic Review, American Economic Association, vol. 95(3), pages 862-877, June.
    3. Stephen Morris, 2001. "Political Correctness," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 231-265, April.
    4. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-479, June.
    5. Wei Li, 2007. "Changing One's Mind when the Facts Change: Incentives of Experts and the Design of Reporting Protocols," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(4), pages 1175-1194.
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    Cited by:

    1. Li Hao & Wei Li, 2013. "Misinformation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 253-277, February.
    2. Fenglin Jia & Daner Sun & Qing Ma & Chee-Kit Looi, 2022. "Developing an AI-Based Learning System for L2 Learners’ Authentic and Ubiquitous Learning in English Language," Sustainability, MDPI, vol. 14(23), pages 1-18, November.
    3. José M. Ferrer & M. Teresa Ortuño & Gregorio Tirado, 2020. "A New Ant Colony-Based Methodology for Disaster Relief," Mathematics, MDPI, vol. 8(4), pages 1-23, April.

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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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