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Business Language for Agents with Asymmetric Perceptions

Author

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  • Jack Stecher

Abstract

This paper addresses the relationship between individual perceptions and the uses of a business language. Perceptions are modeled explicitly, and are not common knowledge. A business language enables individuals with different perceptions to trade. I present a formal criterion for faithfulness of the business language among heterogeneous agents. Roughly, the language is heterogeneously faithful if different agents who observe the same real-world object can perceive it in a way that leads them to make the same report. Different business languages lead to different possible equilibria, and thus can be Pareto-ranked. In particular, heterogeneously faithful languages are compared with one where agents can fully disclose what they perceive

Suggested Citation

  • Jack Stecher, 2004. "Business Language for Agents with Asymmetric Perceptions," Econometric Society 2004 Australasian Meetings 225, Econometric Society.
  • Handle: RePEc:ecm:ausm04:225
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    Cited by:

    1. Stecher, Jack D., 2006. "The Nonequivalence of the Earnings and Dividends Approaches to Equity Valuation," Discussion Papers 2006/1, Norwegian School of Economics, Department of Business and Management Science.

    More about this item

    Keywords

    Reporting; Faithfulness; Full Disclosure; Perceptions;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools

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