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Communication with endogenous information acquisition

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  • Pei, Harry Di

Abstract

I develop a theory of communication in which a sender gathers costly information before giving advice to a receiver. In a general setting, I show that the sender always communicates all her information to the receiver in every equilibrium. In the uniform-quadratic model in which the sender can choose any finite partition as her information structure, an upwardly biased sender can convey more precise information when recommending a larger action.

Suggested Citation

  • Pei, Harry Di, 2015. "Communication with endogenous information acquisition," Journal of Economic Theory, Elsevier, vol. 160(C), pages 132-149.
    • Handle: RePEc:eee:jetheo:v:160:y:2015:i:c:p:132-149
    DOI: 10.1016/j.jet.2015.08.011
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    References listed on IDEAS

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    1. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
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    4. Ivanov, Maxim, 2010. "Informational control and organizational design," Journal of Economic Theory, Elsevier, vol. 145(2), pages 721-751, March.
    5. Austen-Smith, David, 1994. "Strategic Transmission of Costly Information," Econometrica, Econometric Society, vol. 62(4), pages 955-963, July.
    6. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    7. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    More about this item

    Keywords

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    JEL classification:

    • 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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