IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2211.13605.html
   My bibliography  Save this paper

Efficient Communication in Organizations

Author

Listed:
  • Federico Vaccari

Abstract

This paper studies the organization of communication between biased senders and a receiver. Senders can misreport their private information at a cost. Efficiency is achieved by clearing information asymmetries without incurring costs. Results show that only one communication protocol is efficient, robust to collusion, and free from unnecessary complexities. This protocol has a simple, adversarial, and public structure. It always induces efficient equilibria, for which a closed-form characterization is provided. The findings are relevant for the design of organizations that seek to improve decision-making while limiting wasteful influence activities.

Suggested Citation

  • Federico Vaccari, 2022. "Efficient Communication in Organizations," Papers 2211.13605, arXiv.org, revised Apr 2024.
    • Handle: RePEc:arx:papers:2211.13605
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2211.13605
    File Function: Latest version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-34, April.
    2. Marco Battaglini, 2002. "Multiple Referrals and Multidimensional Cheap Talk," Econometrica, Econometric Society, vol. 70(4), pages 1379-1401, July.
    3. Milgrom, Paul R, 1988. "Employment Contracts, Influence Activities, and Efficient Organization Design," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 42-60, February.
    4. Navin Kartik, 2009. "Strategic Communication with Lying Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1359-1395.
    5. Claude Fluet, 2009. "Accuracy Versus Falsification Costs: The Optimal Amount of Evidence under Different Procedures," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 25(1), pages 134-156, May.
    6. Philippe Jehiel, 1999. "Information Aggregation and Communication in Organizations," Management Science, INFORMS, vol. 45(5), pages 659-669, May.
    7. Vijay Krishna & John Morgan, 2001. "A Model of Expertise," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 747-775.
    8. Vaccari, Federico, 2023. "Competition in costly talk," Journal of Economic Theory, Elsevier, vol. 213(C).
    9. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
    10. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
    11. Marco Ottaviani & Francesco Squintani, 2006. "Naive audience and communication bias," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(1), pages 129-150, December.
    12. Inga Deimen & Dezsö Szalay, 2019. "Information and Communication in Organizations," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 545-549, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vaccari, Federico, 2023. "Competition in costly talk," Journal of Economic Theory, Elsevier, vol. 213(C).
    2. Arnold Polanski & Mark Quement, 2023. "The battle of opinion: dynamic information revelation by ideological senders," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 463-483, June.
    3. Vaccari, Federico, 2021. "Competition in Signaling," MPRA Paper 106071, University Library of Munich, Germany.
    4. Irene Valsecchi, 2013. "The expert problem: a survey," Economics of Governance, Springer, vol. 14(4), pages 303-331, November.
    5. Gordon Rausser & Leo Simon & Jinhua Zhao, 2015. "Rational exaggeration and counter-exaggeration in information aggregation games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 109-146, May.
    6. Lai, Ernest K., 2014. "Expert advice for amateurs," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 1-16.
    7. Federico Vaccari, 2023. "Influential news and policy-making," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1363-1418, November.
    8. Venkatesh, Raghul S, 2017. "Cheap Talk with Strategic Substitutability," CRETA Online Discussion Paper Series 31, Centre for Research in Economic Theory and its Applications CRETA.
    9. Grillo, Edoardo, 2016. "The hidden cost of raising voters’ expectations: Reference dependence and politicians’ credibility," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 126-143.
    10. Persson, Petra, 2018. "Attention manipulation and information overload," Behavioural Public Policy, Cambridge University Press, vol. 2(1), pages 78-106, May.
    11. Boris Knapp, 2021. "Fake Reviews and Naive Consumers," Vienna Economics Papers 2102, University of Vienna, Department of Economics.
    12. Boris Knapp, 2021. "Fake Reviews and Naive Consumers," Vienna Economics Papers vie2102, University of Vienna, Department of Economics.
    13. Albertazzi, Andrea & Ploner, Matteo & Vaccari, Federico, 2021. "Welfare in Experimental News Markets," SocArXiv 5j2w8, Center for Open Science.
    14. Alistair J. Wilson & Emanuel Vespa, 2012. "Communication With Multiple Senders and Multiple Dimensions: An Experiment," Working Paper 384, Department of Economics, University of Pittsburgh, revised Mar 2012.
    15. Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2014. "Communication and authority with a partially informed expert," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 176-197, March.
    16. Roland Hodler & Simon Loertscher & Dominic Rohner, 2010. "Biased experts, costly lies, and binary decisions," IEW - Working Papers 496, Institute for Empirical Research in Economics - University of Zurich.
    17. Dilmé, Francesc, 2022. "Strategic communication with a small conflict of interest," Games and Economic Behavior, Elsevier, vol. 134(C), pages 1-19.
    18. Alistair J. Wilson & Emanuel Vespa, 2012. "Communication With Multiple Senders and Multiple Dimensions: An Experiment," Working Paper 401, Department of Economics, University of Pittsburgh, revised Mar 2012.
    19. Dziuda, Wioletta, 2011. "Strategic argumentation," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1362-1397, July.
    20. Alistair Wilson & Emanuel Vespa, 2012. "Communication With Multiple Senders and Multiple Dimensions: An Experiment," Working Paper 461, Department of Economics, University of Pittsburgh, revised Sep 2012.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2211.13605. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.