Strategic Communication with Reporting Costs

35 Pages Posted: 27 Jan 2016 Last revised: 30 Jun 2020

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: January 27, 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: disclosure, persuasion, active judging, adversarial, inquisitorial

JEL Classification: D82, K41

Suggested Citation

Emons, Winand and Fluet, Claude-Denys, Strategic Communication with Reporting Costs (January 27, 2016). Available at SSRN: https://ssrn.com/abstract=2723370 or http://dx.doi.org/10.2139/ssrn.2723370

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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