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Vagueness and information-sharing

Listed author(s):
  • Troya-Martinez, Marta

This paper considers a model in which two heterogeneous principals need to concur to approve a project proposed by an agent. The agent provides them with information about the project's desirability and the principals can agree to share it. We seek to understand the impact of such an agreement when the agent can secretly choose the vagueness of the information reported to the principals. We show that when the project is controversial and the principals retain their veto power, information-sharing makes the agent use very vague information. In these circumstances, both principals are willing to extend cooperation to decision-making in order to extract more precise information from the agent.

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File URL: http://www.sciencedirect.com/science/article/pii/S0899825616300926
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 100 (2016)
Issue (Month): C ()
Pages: 301-320

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Handle: RePEc:eee:gamebe:v:100:y:2016:i:c:p:301-320
DOI: 10.1016/j.geb.2016.09.003
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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