Reputational cheap talk

Marco Ottaviani; Peter Norman Sørensen

Reputational cheap talk

Økonomisk Institut

100 Citationer (Scopus)

Abstract

We analyze information reporting by a privately informed expert concerned about being perceived to have accurate information. When the expert's reputation is updated on the basis of the report as well as the realized state, the expert typically does not wish to truthfully reveal the signal observed. The incentives to deviate from truthtelling are characterized and shown to depend on the information structure. In equilibrium, experts can credibly communicate only part of their information. Our results also hold when experts have private information about their own accuracy and care about their reputation relative to others

Originalsprog	Engelsk
Tidsskrift	RAND Journal of Economics
Vol/bind	37
Udgave nummer	1
Sider (fra-til)	155-175
ISSN	0741-6261
Status	Udgivet - 2006

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T1 - Reputational cheap talk

AU - Ottaviani, Marco

AU - Sørensen, Peter Norman

N1 - JEL Classification: C72, D82, D83

PY - 2006

Y1 - 2006

N2 - We analyze information reporting by a privately informed expert concerned about being perceived to have accurate information. When the expert's reputation is updated on the basis of the report as well as the realized state, the expert typically does not wish to truthfully reveal the signal observed. The incentives to deviate from truthtelling are characterized and shown to depend on the information structure. In equilibrium, experts can credibly communicate only part of their information. Our results also hold when experts have private information about their own accuracy and care about their reputation relative to others

AB - We analyze information reporting by a privately informed expert concerned about being perceived to have accurate information. When the expert's reputation is updated on the basis of the report as well as the realized state, the expert typically does not wish to truthfully reveal the signal observed. The incentives to deviate from truthtelling are characterized and shown to depend on the information structure. In equilibrium, experts can credibly communicate only part of their information. Our results also hold when experts have private information about their own accuracy and care about their reputation relative to others

KW - Faculty of Social Sciences

KW - reputation

KW - equilibrium

M3 - Journal article

SN - 0741-6261

VL - 37

SP - 155

EP - 175

JO - RAND Journal of Economics

JF - RAND Journal of Economics

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Reputational cheap talk

Abstract

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