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Characteristics of information transmission under uncertainty

Author

Listed:
  • Mariko Tanaka

    (Graduate School of Economics, University of Tokyo)

Abstract

This paper utilizes a sender-receiver game involving a government and infinite heterogeneous agents to analyze the characteristics of information transmission in an environment where a true state does not exist and coordination among various players is required. It shows that a message conveyed by the government induces agents to consider public opinion not through direct communication, but through expectations concerning the government's action. It also shows that the need for coordination, self-interest, and altruism enable the government to convey a more precise and credible message by decreasing the incentive to misrepresent information, whereas a perfectly altruistic government would always convey a precise message.

Suggested Citation

  • Mariko Tanaka, 2012. "Characteristics of information transmission under uncertainty," Economics Bulletin, AccessEcon, vol. 32(3), pages 2629-2637.
    • Handle: RePEc:ebl:ecbull:eb-12-00454
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I3-P252.pdf
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    References listed on IDEAS

    as
    1. Ricardo Alonso & Wouter Dessein & Niko Matouschek, 2008. "When Does Coordination Require Centralization? Corrigendum," American Economic Review, American Economic Association, vol. 98(3), pages 1195-1196, June.
    2. Stein, Jeremy C, 1989. "Cheap Talk and the Fed: A Theory of Imprecise Policy Announcements," American Economic Review, American Economic Association, vol. 79(1), pages 32-42, March.
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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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