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Reputational Cheap Talk

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Author Info
Marco Ottaviani () (London Business School)
Peter Norman Sorensen () (University of Copenhagen)

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Abstract

We analyze information reporting by a privately informed expert concerned about being perceived to have accurate information. When the expert's reputation is updated on the basis of the report as well as the realized state, the expert typically does not wish to truthfully reveal the signal observed. The incentives to deviate from truthtelling are characterized and shown to depend on the information structure. In equilibrium, experts can credibly communicate only part of their information. Our results also hold when experts have private information about their own accuracy and care about their reputation relative to others. Ordering information: This article can be ordered from http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi?action=view&year=2006&issue=spr&page=155.

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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 37 (2006)
Issue (Month): 1 (Spring)
Pages: 155-175
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rje:randje:v:37:y:2006:1:p:155-175

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Web page: http://www.rje.org

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This page was last updated on 2009-11-13.


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