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Communication for Public Goods

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  • Kawamura, Kohei

Abstract

This paper studies information transmission between multiple agents with di¤erent preferences and a welfare maximizing decision maker who chooses the quality or quantity of a public good (e.g. provision of public health service; carbon emissions policy; pace of lectures in a classroom) that is consumed by all of them. Communication in such circumstances suffers from the agents' incentive to "exaggerate" their preferences relative to the average of the other agents, since the decision maker's reaction to each agent's message is weaker than in one-to-one communication. As the number of agents becomes larger the quality of information transmission diminishes. The use of binary messages (e.g. "yes" or "no") is shown to be a robust mode of communication when the main source of informational distortion is exaggeration.

Suggested Citation

  • Kawamura, Kohei, 2008. "Communication for Public Goods," SIRE Discussion Papers 2008-25, Scottish Institute for Research in Economics (SIRE).
  • Handle: RePEc:edn:sirdps:38
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    File URL: http://hdl.handle.net/10943/38
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    References listed on IDEAS

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    Cited by:

    1. Kovác, Eugen & Mylovanov, Tymofiy, 2009. "Stochastic mechanisms in settings without monetary transfers: The regular case," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1373-1395, July.

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