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Strategic communication with reporting costs

Author

Listed:
  • Winand Emons

    (Universität Bern, CEPR)

  • Claude Fluet

    (Université Laval, CRED)

Abstract

A decision maker relies on information of parties affected by her decision. These parties try to influence her decision by selective disclosure of facts. As is well known from the literature, competition between the informed parties constrains their ability to manipulate information. We depart from this literature by introducing a cost to communicate. Our parties trade off their reporting cost against the effect on the decision. Some information is never revealed. In contrast to setups without communication costs, our decision maker can benefit by ex ante committing to an ex post suboptimal decision rule. Moreover, committing ex ante not to listen to one of the parties may also be beneficial for the decision maker.

Suggested Citation

  • Winand Emons & Claude Fluet, 2019. "Strategic communication with reporting costs," Theory and Decision, Springer, vol. 87(3), pages 341-363, October.
  • Handle: RePEc:kap:theord:v:87:y:2019:i:3:d:10.1007_s11238-019-09709-4
    DOI: 10.1007/s11238-019-09709-4
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    Cited by:

    1. Dilip Ravindran & Zhihan Cui, 2020. "Competing Persuaders in Zero-Sum Games," Papers 2008.08517, arXiv.org, revised Jun 2022.
    2. Albertazzi, Andrea & Ploner, Matteo & Vaccari, Federico, 2021. "Welfare in Experimental News Markets," SocArXiv 5j2w8, Center for Open Science.

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    More about this item

    Keywords

    Disclosure; Persuasion; Active judging; Adversarial; Inquisitorial;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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