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Strategic Communication with Reporting Costs

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  • Emons, Winand
  • Fluet, Claude

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. Typically, they never reveal all information. A better outcome may be implemented if the decision-maker adopts an active stance by barring one party from reporting or through cheap talk allowing coordination on a particular equilibrium.

Suggested Citation

  • Emons, Winand & Fluet, Claude, 2016. "Strategic Communication with Reporting Costs," CEPR Discussion Papers 11105, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11105
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    Cited by:

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    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

    active judging; adversarial; disclosure; inquisitorial; persuasion;
    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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