The Power of Semi-Public Communication

40 Pages Posted: 16 Jun 2021 Last revised: 26 Sep 2021

See all articles by Takuma Habu

Takuma Habu

University of Chicago - Department of Economics

Date Written: August 27, 2021

Abstract

I study how an informed manager can benefit from cheap-talk communication by strategically forming diverse groups of uninformed, heterogenous workers. Optimal grouping, or partition, of workers trades off the benefit from gaining credibility through having greater diversity in each group against the cost from the inability to tailor communication among workers in the same group. Public and private communication are restrictions on the partitions the manager can adopt, and the manager prefers semi-public communication whenever there is a possibility to benefit from differently diverse groups of workers. I show that it is optimal for the manager to separate workers who need to be persuaded from those that do not, and I derive further properties of optimal partitions when workers are single minded and when workers have preferences over a spectrum of project types.

Keywords: Cheap talk, securability, semi-public communication

JEL Classification: C71, C72, D82, D83, J40

Suggested Citation

Habu, Takuma, The Power of Semi-Public Communication (August 27, 2021). Available at SSRN: https://ssrn.com/abstract=3866720 or http://dx.doi.org/10.2139/ssrn.3866720

Takuma Habu (Contact Author)

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

HOME PAGE: http://takumahabu.com

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