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Communication and authority with a partially informed expert

Author

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  • Murali Agastya
  • Parimal Kanti Bag
  • Indranil Chakraborty

Abstract

type="main"> A sender-receiver game a la Crawford-Sobel is analyzed where the sender has expertise on some but not all the payoff-relevant factors. This residual uncertainty can either improve (even allow full revelation) or worsen the quality of transmitted information depending on a statistic called the effective bias. For symmetrically distributed residual uncertainty or quadratic loss functions, (i) the quality of information transmission is independent of the riskiness of residual uncertainty, (ii) it may be suboptimal to allocate authority to the informed player, (iii) despite players' preferences being arbitrarily close, it is impossible to assert that the receiver prefers delegation over authority or vice versa.

Suggested Citation

  • 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.
  • Handle: RePEc:bla:randje:v:45:y:2014:i:1:p:176-197
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    File URL: http://hdl.handle.net/10.1111/1756-2171.12047
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    References listed on IDEAS

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    Cited by:

    1. Murali Agastya & Parimal Kanti Bag & Indranil Chakraborty, 2015. "Proximate preferences and almost full revelation in the Crawford–Sobel game," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 201-212, October.
    2. Schottmüller, Christoph, 2013. "Cost incentives for doctors: A double-edged sword," European Economic Review, Elsevier, vol. 61(C), pages 43-58.
    3. Silvia Dominguez Martinez & Randolph Sloof, 2016. "Communication versus (Restricted) Delegation: An Experimental Comparison," Tinbergen Institute Discussion Papers 16-050/VII, Tinbergen Institute.
    4. repec:hit:hitjec:v:58:y:2017:i:2:p:89-106 is not listed on IDEAS
    5. Aurora García-Gallego & Penélope Hernández-Rojas & Amalia Rodrigo-González, 2019. "Efficient coordination in the lab," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 14(1), pages 175-201, March.
    6. Katayama, Hajime & Meagher, Kieron J. & Wait, Andrew, 2018. "Authority and communication in firms," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 315-348.

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