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Costly Evidence and Discretionary Disclosure

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  • Mark Whitmeyer
  • Kun Zhang

Abstract

A sender flexibly acquires evidence--which she may pay a third party to certify--to disclose to a receiver. When evidence acquisition is overt, the receiver observes the evidence gathering process irrespective of whether its outcome is certified. When acquisition is covert, the receiver does not. In contrast to the case with exogenous evidence, the receiver prefers a strictly positive certification cost. As acquisition costs vanish, equilibria converge to the Pareto-worst free-learning equilibrium. The receiver always prefers covert to overt evidence acquisition.

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  • Mark Whitmeyer & Kun Zhang, 2022. "Costly Evidence and Discretionary Disclosure," Papers 2208.04922, arXiv.org.
    • Handle: RePEc:arx:papers:2208.04922
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    References listed on IDEAS

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    Cited by:

    1. Paula Onuchic & Jo~ao Ramos, 2023. "Disclosure and Incentives in Teams," Papers 2305.03633, arXiv.org.

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