Multiple Advisors with Reputation
This paper examines reputation, the belief of a decision maker about types of advisors, in a two period cheap talk model where the decision maker obtains messages from two advisors. The decision maker believes that an advisor can be one of two types - an advisor who is biased towards suggesting any particular advice (bad advisor) or an advisor who has the same preferences as the decision maker (good advisor). I assume that each advisor perfectly knows the type of the other advisor, but his signal about the state of the world is imperfect. Strong reputational concern makes the good advisor sometimes tell a lie in the first period regardless of the type of the other advisor. It is shown that the presence of the other advisor does affect the message sent by an advisor. The good advisor has a greater incentive to tell a lie when he knows that the other advisor is bad rather than good. If each type of advisor considers his second period sufficiently important, it is better for the decision maker to have a single advisor.
|Date of creation:||Dec 2006|
|Contact details of provider:|| Postal: P.O. Box 882, Politickych veznu 7, 111 21 Praha 1|
Phone: (+420) 224 005 123
Fax: (+420) 224 005 333
Web page: http://www.cerge-ei.cz
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stephen Morris, 2001.
Journal of Political Economy,
University of Chicago Press, vol. 109(2), pages 231-265, April.
- Olszewski, Wojciech, 2004. "Informal communication," Journal of Economic Theory, Elsevier, vol. 117(2), pages 180-200, August.
- Ottaviani, Marco & Sorensen, Peter Norman, 2006.
Journal of Economic Theory,
Elsevier, vol. 126(1), pages 120-142, January.
- Kreps, David M. & Wilson, Robert, 1982.
"Reputation and imperfect information,"
Journal of Economic Theory,
Elsevier, vol. 27(2), pages 253-279, August.
- Paul Milgrom & John Roberts, 1980.
"Predation, Reputation, and Entry Deterrence,"
427, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Marco Battaglini, 1999.
"Multiple Referrals and Multidimensional Cheap Talk,"
1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Marco Battaglini, 2002. "Multiple Referrals and Multidimensional Cheap Talk," Econometrica, Econometric Society, vol. 70(4), pages 1379-1401, July.
- Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers 1557, Econometric Society.
- Battaglini Marco, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-34, April.
- Ronny Razin & Gilat Levy, 2004.
"Multidimentional Cheap Talk,"
2004 Meeting Papers
184, Society for Economic Dynamics.
- In-Uck Park, 2005. "Cheap-Talk Referrals of Differentiated Experts in Repeated Relationships," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 391-411, Summer.
- Jeffrey C. Ely & Juuso Valimaki, 2002.
1348, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Joel Sobel, 1985. "A Theory of Credibility," Review of Economic Studies, Oxford University Press, vol. 52(4), pages 557-573.
When requesting a correction, please mention this item's handle: RePEc:cer:papers:wp314. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jana Koudelkova)
If references are entirely missing, you can add them using this form.