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Full Disclosure in Decentralized Organizations

Author

Listed:
  • Jeanne Hagenbach

    (Ecole Polytechnique [Palaiseau])

  • Frédéric Koessler

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

Abstract

We characterize sufficient conditions for full and decentralized disclosure of hard information in organizations with asymmetrically informed and self interested agents with quadratic loss functions. Incentive conflicts arise because agents have different (and possibly interdependent) ideal actions and different incentives to coordinate with each others. A fully revealing sequential equilibrium exists in the disclosure game if each player's ideal action is monotonic in types and types are independently distributed, but may fail to exist with non-monotonic ideal actions or correlated types. When biases between players' ideal actions are constant across states, complete information is the Pareto dominant information structure. In that case, there is a fully revealing sequential equilibrium in which informational incentive constraints are satisfied ex-post, so it exists for all possible prior beliefs, even when players' types are correlated. This existence result applies whether information disclosure is private or public, and is extended to partial certifiability of information.

Suggested Citation

  • Jeanne Hagenbach & Frédéric Koessler, 2011. "Full Disclosure in Decentralized Organizations," PSE Working Papers halshs-00652279, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00652279 Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00652279
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    References listed on IDEAS

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    Cited by:

    1. Matthew Gentzkow & Emir Kamenica, 2017. "Disclosure of endogenous information," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), pages 47-56.
    2. Jeanne Hagenbach & Frédéric Koessler & Eduardo Perez‐Richet, 2014. "Certifiable Pre‐Play Communication: Full Disclosure," Econometrica, Econometric Society, vol. 82(3), pages 1093-1131, May.

    More about this item

    Keywords

    Certifiable types; Coordination; Information disclosure; Multi-divisional organizations;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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