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Strategic Information Acquisition and Transmission

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Listed:
  • Rossella Argenziano
  • Sergei Severinov
  • Francesco Squintani

Abstract

This paper explores the implications of costly information acquisition in a strategic communication setting. We show that equilibrium decisions based on a biased expert's advice may be more precise than when information is directly acquired by the decision maker, even if the expert is not more efficient than the decision maker at acquiring information. This result bears important implications for organization design. Communication by an expert to a decision maker may often outperform delegation of the decision-making authority to the expert, as well as centralization by the decision maker of both information acquisition and decision-making authority.

Suggested Citation

  • Rossella Argenziano & Sergei Severinov & Francesco Squintani, 2016. "Strategic Information Acquisition and Transmission," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 119-155, August.
  • Handle: RePEc:aea:aejmic:v:8:y:2016:i:3:p:119-55
    Note: DOI: 10.1257/mic.20140135
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alexander Frug, 2016. "Strategic Gradual Learning and Information Transmission," Working Papers 937, Barcelona Graduate School of Economics.
    2. Hidir, Sinem, 2017. "Information Acquisition and Credibility in Cheap Talk," CRETA Online Discussion Paper Series 36, Centre for Research in Economic Theory and its Applications CRETA.
    3. Alexander Frug, 2016. "Strategic gradual learning and information transmission," Economics Working Papers 1544, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Deimen, Inga & Szalay, Dezsö, 2014. "A Smooth, strategic communication," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 479, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    5. Rafael Repullo, 2018. "Hierarchical bank supervision," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(1), pages 1-26, March.
    6. Christopher S. Cotton & Arnaud Déllis, 2016. "Informational Lobbying and Agenda Distortion," Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(4), pages 762-793.
    7. Hedlund, Jonas, 2014. "Bayesian signaling," Working Papers 0577, University of Heidelberg, Department of Economics.
    8. Deimen, Inga & Szalay, Dezso, 2015. "Information, authority, and smooth communication in organizations," CEPR Discussion Papers 10969, C.E.P.R. Discussion Papers.
    9. Maxim Ivanov, 2016. "Dynamic learning and strategic communication," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(3), pages 627-653, August.
    10. repec:aea:aejmic:v:9:y:2017:i:3:p:100-125 is not listed on IDEAS
    11. Szalay, Dezsö, 2012. "Strategic information transmission and stochastic orders," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 386, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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

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