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Communicating Bias

Author

Listed:
  • Swagata Bhattacharjee

    (Ashoka University)

  • Srijita Ghosh

    (Ashoka University)

  • Suraj Shekhar

    (Ashoka University)

Abstract

We consider a static cheap talk model in an environment with either one or two experts whose biases are privately known by the experts themselves. Before the experts learn the state, they send a cheap talk message about their bias to the decision maker. Subsequently, the decision maker chooses one expert to get state relevant advice from. We ask two questions - One, is there an equilibrium where the experts’ bias is fully revealed? Two, is the bias revealing equilibrium welfare improving for the decision maker? We find that when there is only one expert, there is no bias revealing equilibrium. However, if there are two experts, there exists a bias revealing equilibrium, and under some conditions it gives the decision maker more utility than any equilibrium which is possible without bias revelation. This highlights a new channel through which sender competition can benefit the decision maker, through which sender competition can benefit the decision maker.

Suggested Citation

  • Swagata Bhattacharjee & Srijita Ghosh & Suraj Shekhar, 2024. "Communicating Bias," Working Papers 109, Ashoka University, Department of Economics.
    • Handle: RePEc:ash:wpaper:109
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    References listed on IDEAS

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    1. Li, Ming & Madarász, Kristóf, 2008. "When mandatory disclosure hurts: Expert advice and conflicting interests," Journal of Economic Theory, Elsevier, vol. 139(1), pages 47-74, March.
    2. Mark Thordal-Le Quement, 2016. "The (Human) Sampler's Curses," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 115-148, November.
    3. Li Ming, 2010. "Advice from Multiple Experts: A Comparison of Simultaneous, Sequential, and Hierarchical Communication," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-24, April.
    4. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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