This paper offers a simple but rich framework to study communication subject to various constraints such as anonymity requirements, equal treatment of multiple agents, overconfidence of an expert, and garbling, by extending the cheap talk model of Crawford and Sobel (1982). Common to these seemingly distinct types of constraints in communication is that the action by a decision maker is less sensitive to a message than without such constraints. Reduced sensitivity can alter the structure of informative equilibria dramatically, and leads to a type of informational distortion, termed incentives to exaggerate, which differs qualitatively from the well-known incentives to overstate/understate. We demonstrate that the two different types of distortion may partly offset each other, so the introduction of the costraints may be beneficial when the level to conflict between communicating parties is large. Our model can also be applied to study communication in public good provision where equal treatment is often implicitly assumed.
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number
268.
References listed on IDEAS 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.:
Vijay Krishna & John Morgan, 1999.
"A Model of Expertise,"
Working Papers
154, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
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Kay Mitusch & Roland Strausz, 2004.
"Mediation in Situations of Conflict and Limited Commitment,"
Discussion Papers
24, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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