Vagueness and Information-Sharing

39 Pages Posted: 29 Sep 2014 Last revised: 10 Mar 2017

See all articles by Marta Troya-Martinez

Marta Troya-Martinez

New Economic School (NES); Centre for Economic Policy Research (CEPR)

Date Written: August 17, 2016

Abstract

This paper considers a model in which two heterogeneous principals need to concur to approve a project proposed by an agent. The agent provides them with information about the project's desirability and the principals can agree to share it. We seek to understand the impact of such an agreement when the agent can secretly choose the vagueness of the information reported to the principals. We show that, when the project is controversial and the principals retain their veto power, information-sharing makes the agent use very vague information. In these circumstances, both principals are willing to extend cooperation to the decision-making in order to extract a more precise information from the agent.

Keywords: Common agency, public communication, signal-jamming.

JEL Classification: D83, F53, L4.

Suggested Citation

Troya-Martinez, Marta, Vagueness and Information-Sharing (August 17, 2016). Games and Economic Behavior, Vol. 100, November 2016, Pages 301-320, Available at SSRN: https://ssrn.com/abstract=2502509 or http://dx.doi.org/10.2139/ssrn.2502509

Marta Troya-Martinez (Contact Author)

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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