Timing of Predictions in Dynamic Cheap Talk: Experts vs. Quacks

University of Zurich, Department of Economics, Working Paper No. 334

42 Pages Posted: 23 Nov 2019

See all articles by Aleksei Smirnov

Aleksei Smirnov

University of Zurich, Department of Economics, Students

Egor Starkov

University of Copenhagen - Department of Economics

Date Written: November 11, 2019

Abstract

The paper studies a dynamic communication game in the presence of adverse selection and career concerns. A forecaster of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a sufficiently general class earlier reports are more credible. Further, any report hurts the forecaster’s reputation in the short run, with later reports incurring larger penalties. The reputation of a silent forecaster, on the other hand, gradually improves over time.

Keywords: Career concerns, reputation, dynamic games, games of timing, strategic information transmission

JEL Classification: C73, D82, D83, D84

Suggested Citation

Smirnov, Aleksei and Starkov, Egor, Timing of Predictions in Dynamic Cheap Talk: Experts vs. Quacks (November 11, 2019). University of Zurich, Department of Economics, Working Paper No. 334, Available at SSRN: https://ssrn.com/abstract=3485707 or http://dx.doi.org/10.2139/ssrn.3485707

Aleksei Smirnov (Contact Author)

University of Zurich, Department of Economics, Students ( email )

Zurich
Switzerland

Egor Starkov

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

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