To Disclose or Not to Disclose: Cheap Talk with Uncertain Biases
AbstractI study strategic information transmission when biases are uncertain. A perfectly informed expert advises a decision maker. The expert has biases with direction unknown to the decision maker. I show that all equilibria are of partitional form as identified by Crawford and Sobel (1982). It never benefits the decision maker or the expert to have the bias of the expert disclosed. The decision maker is better off when the bias distribution is more balanced or when the bias size is smaller.
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Bibliographic InfoPaper provided by Concordia University, Department of Economics in its series Working Papers with number 04003.
Length: 52 pages
Date of creation: Aug 2003
Date of revision: Aug 2004
Cheap Talk; Transparency; Advice.;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-11-22 (Accounting & Auditing)
- NEP-ALL-2004-11-22 (All new papers)
- NEP-INO-2004-11-22 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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