Strategic Communication with Reporting Costs

35 Pages Posted: 17 Feb 2016

See all articles by Winand Emons

Winand Emons

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR)

Claude Fluet

Université Laval

Multiple version iconThere are 2 versions of this paper

Date Written: February 2016

Abstract

A decision-maker relies on information of parties affected by her decision. These parties try to influence her decision by selective disclosure of facts. As is well known from the literature, competition between the informed parties constrains their ability to manipulate information. We depart from this literature by introducing a cost to communicate. Our parties trade off their reporting cost against the effect on the decision. Typically, they never reveal all information. A better outcome may be implemented if the decision-maker adopts an active stance by barring one party from reporting or through cheap talk allowing coordination on a particular equilibrium.

Keywords: active judging, adversarial, disclosure, inquisitorial, persuasion

JEL Classification: D82, K41

Suggested Citation

Emons, Winand and Fluet, Claude-Denys, Strategic Communication with Reporting Costs (February 2016). CEPR Discussion Paper No. DP11105, Available at SSRN: https://ssrn.com/abstract=2733078

Winand Emons (Contact Author)

University of Bern - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Claude-Denys Fluet

Université Laval ( email )

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Quebec, Quebec G1K 7P4
Canada
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