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Presidential Address Costly Communication and Incentives

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  • Mathias Dewatripont

Abstract

This paper discusses the introduction of incentive considerations in a model of costly communication. It starts from a simplified version of a team-theoretic model due to Dessein and Santos (2003), which relates the design of an organization to its adaptiveness to environmental uncertainty. Incentives are introduced in this setting, following an approach developed by Dewatripont and Tirole (2005). Doing so enriches the analysis by allowing for the coexistence of various forms of communication, in particular cheap talk versus costly communication. (JEL: D8) (c) 2006 by the European Economic Association.

Suggested Citation

  • Mathias Dewatripont, 2006. "Presidential Address Costly Communication and Incentives," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 253-268, 04-05.
  • Handle: RePEc:tpr:jeurec:v:4:y:2006:i:2-3:p:253-268
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    Cited by:

    1. Spulber, Daniel F., 2012. "Tacit knowledge with innovative entrepreneurship," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 641-653.
    2. Ennio Bilancini & Leonardo Boncinelli, 2014. "Persuasion with Reference Cues and Elaboration Costs," Center for Economic Research (RECent) 102, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".

    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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