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Full Disclosure in Decentralized Organizations

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Author Info

  • Jeanne Hagenbach

    (Ecole Polytechnique [Palaiseau] - Ecole Polytechnique)

  • Frédéric Koessler

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

Abstract

We characterize sufficient conditions for full and decentralized disclosure of hard information in organizations with asymmetrically informed and self interested agents with quadratic loss functions. Incentive conflicts arise because agents have different (and possibly interdependent) ideal actions and different incentives to coordinate with each others. A fully revealing sequential equilibrium exists in the disclosure game if each player's ideal action is monotonic in types and types are independently distributed, but may fail to exist with non-monotonic ideal actions or correlated types. When biases between players' ideal actions are constant across states, complete information is the Pareto dominant information structure. In that case, there is a fully revealing sequential equilibrium in which informational incentive constraints are satisfied ex-post, so it exists for all possible prior beliefs, even when players' types are correlated. This existence result applies whether information disclosure is private or public, and is extended to partial certifiability of information.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00652279.

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Date of creation: Dec 2011
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Handle: RePEc:hal:psewpa:halshs-00652279

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00652279
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Related research

Keywords: Certifiable types ; Coordination ; Information disclosure ; Multi-divisional organizations;

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References

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  1. repec:fth:stanho:e-89-7 is not listed on IDEAS
  2. Laura Veldkamp & Christian Hellwig, 2006. "Knowing What Others Know: Coordination Motives in Information Acquisition," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 06-14, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Camille Cornand & Frank Heinemann, 2004. "Optimal Degree of Public Information Dissemination," CESifo Working Paper Series 1353, CESifo Group Munich.
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  9. Jerome Mathis, 2006. "Full Revelation of Information in Sender-Receiver Games of Persuasion," THEMA Working Papers 2006-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  10. Antoni Calvó-Armengol & Joan de Martí, 2007. "Communication Networks: Knowledge and Decisions," American Economic Review, American Economic Association, American Economic Association, vol. 97(2), pages 86-91, May.
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  12. Jeanne Hagenbach & Frédéric Koessler, 2009. "Strategic Communication Networks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00367692, HAL.
  13. David P. Myatt & Chris Wallace, 2009. "Endogenous Information Acquisition in Coordination Games," Economics Series Working Papers 445, University of Oxford, Department of Economics.
  14. Koessler, Frédéric, 2008. "Lobbying with two audiences: Public vs private certification," Mathematical Social Sciences, Elsevier, Elsevier, vol. 55(3), pages 305-314, May.
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Cited by:
  1. Jeanne Hagenbach & Frédéric Koessler & Eduardo Perez‐Richet, 2014. "Certifiable Pre‐Play Communication: Full Disclosure," Econometrica, Econometric Society, Econometric Society, vol. 82(3), pages 1093-1131, 05.

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