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The strategist and the tactician

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  • Rachmilevitch, Shiran

Abstract

An agent recommends one of n alternatives to a decision maker (DM), who needs to choose one alternative. Each alternative has a benefit and a cost. The agent knows the benefits, but not the costs; the DM knows the costs, but not the benefits. The DM’s payoff equals the benefit minus the cost, the agent’s payoff equals the benefit. The interpretation is that the agent is a “tactician” whereas the DM is a “strategist,” in the sense that they have a common component in their preferences (the benefit) but the strategist further has “big picture considerations” (the costs), which are absent from the tactician’s world view. If there are two alternatives, the agent recommends a maximum-benefit alternative in any non-trivial equilibrium. With more than two alternatives such equilibrium exists if the model is symmetric, but not if asymmetry exceeds a certain level.

Suggested Citation

  • Rachmilevitch, Shiran, 2018. "The strategist and the tactician," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 427-434.
  • Handle: RePEc:eee:jeborg:v:155:y:2018:i:c:p:427-434
    DOI: 10.1016/j.jebo.2018.09.013
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    References listed on IDEAS

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    More about this item

    Keywords

    Sender–receiver; Strategist-tactician;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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