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Modes of Communication

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  • Mathias Dewatripont
  • Jean Tirole

Abstract

The paper develops a theory of costly communication in which the sender's and receiver's motivations and abilities endogenously determine the communication mode and the transfer of knowledge. Communication is modeled as a problem of moral hazard in teams, in which the sender and receiver select persuasion and message elaboration efforts. The model is shown to provide a rich set of insights concerning (i) the impact of incentive alignment on communication strategies, (ii) the relative influence and the complementarity/substitutability between issue-relevant communication and cues (information that relates to the credibility of the sender rather than to the issue at stake), and (iii) the path dependency of communication.

Suggested Citation

  • Mathias Dewatripont & Jean Tirole, 2005. "Modes of Communication," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1217-1238, December.
  • Handle: RePEc:ucp:jpolec:v:113:y:2005:i:6:p:1217-1238
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    File URL: http://dx.doi.org/10.1086/497999
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    References listed on IDEAS

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    1. Fudenberg, Drew & Tirole, Jean, 1991. "Perfect Bayesian equilibrium and sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 53(2), pages 236-260, April.
    2. Mathias Dewatripont & Patrick Bolton, 1994. "The firm as a communication network," ULB Institutional Repository 2013/9595, ULB -- Universite Libre de Bruxelles.
    3. 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.
    4. ., 1994. "Firm, Boundaries of the," Chapters,in: The Elgar Companion to Institutional and Evolutionary Economics, chapter 43 Edward Elgar Publishing.
    5. James J. Anton & Dennis A. Yao, 2002. "The Sale of Ideas: Strategic Disclosure, Property Rights, and Contracting," Review of Economic Studies, Oxford University Press, vol. 69(3), pages 513-531.
    6. Radner, Roy, 1992. "Hierarchy: The Economics of Management," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1382-1415, September.
    7. ., 1994. "Firm, Theoru of the (I)," Chapters,in: The Elgar Companion to Institutional and Evolutionary Economics, chapter 44 Edward Elgar Publishing.
    8. Patrick Bolton & Mathias Dewatripont, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 809-839.
    9. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    10. anonymous, 1994. "Research confirms rationality of analysts' forecasts," Economics Update, Federal Reserve Bank of Atlanta, issue Apr, pages 1-2.
    11. Juan D. Carrillo & Thomas Mariotti, 2000. "Strategic Ignorance as a Self-Disciplining Device," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 529-544.
    12. ., 1994. "Firm, Theoru of the (II)," Chapters,in: The Elgar Companion to Institutional and Evolutionary Economics, chapter 45 Edward Elgar Publishing.
    13. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-1146, September.
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    JEL classification:

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

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