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False Modesty

Author

Listed:
  • Rick Harbaugh

    (Indiana University)

  • Dr. Theodore To

    (Bureau of Labor Statistics)

Abstract

Is it always wise to disclose good news? When both the sender and the receiver have private information about the sender's quality, we find that the worst sender type with good news has the most incentive to disclose it, so reporting good news can paradoxically make the sender look bad. If the good news is attainable by sufficiently mediocre types, or if the sender is already expected to be of a relatively high type, nondisclosure equilibria exist in which good news is withheld. Since the sender has a legitimate fear of looking too eager to reveal good news, having a third party disclose the news, or mandating that the sender disclose the news, can help the sender. The predictions are tested by examining when faculty use titles such as 'Dr' and 'Professor' in voicemail greetings and course syllabi.

Suggested Citation

  • Rick Harbaugh & Dr. Theodore To, 2005. "False Modesty," Game Theory and Information 0508003, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:0508003
    Note: Type of Document - pdf; pages: 20
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/game/papers/0508/0508003.pdf
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    References listed on IDEAS

    as
    1. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
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    More about this item

    Keywords

    disclosure; persuasion; communication; verifiable message; countersignaling;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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