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Vagueness and information-sharing

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  • Troya-Martinez, Marta

Abstract

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.

Suggested Citation

  • Troya-Martinez, Marta, 2016. "Vagueness and information-sharing," Games and Economic Behavior, Elsevier, vol. 100(C), pages 301-320.
    • Handle: RePEc:eee:gamebe:v:100:y:2016:i:c:p:301-320
    DOI: 10.1016/j.geb.2016.09.003
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    References listed on IDEAS

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    1. Mikhail Drugov & Marta Troya‐Martinez, 2019. "Vague lies and lax standards of proof: On the law and economics of advice," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 298-315, April.

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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