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Communication and binary decisions : is it better to communicate ?

Author

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  • Frédéric Loss

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris, CNAM Paris - Centre d'enseignement Cnam Paris - CNAM - Conservatoire National des Arts et Métiers [CNAM])

  • Estelle Malavolti

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - ENAC - Ecole Nationale de l'Aviation Civile)

  • Thibaud Vergé

    (Competition Authority - Competition Authority)

Abstract

We study information transmission between an informed expert and an uninformed decision-maker when the decision is binary and the expert does not have a systematic bias. Whenever an equilibrium exists where the decision is delegated to the expert, it is ex ante Pareto-dominant. Adding a round of multilateral communication does not improve information transmission. The decision-maker can, however, improve information transmission by communicating sequentially with two experts. However, introducing multiple rounds of communication (i.e., allowing for rebuttal) does not help.

Suggested Citation

  • Frédéric Loss & Estelle Malavolti & Thibaud Vergé, 2013. "Communication and binary decisions : is it better to communicate ?," Post-Print hal-00874852, HAL.
    • Handle: RePEc:hal:journl:hal-00874852
    DOI: 10.1628/093245613X13621221166330
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    References listed on IDEAS

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    Cited by:

    1. Li, Zhuozheng & Rantakari, Heikki & Yang, Huanxing, 2016. "Competitive cheap talk," Games and Economic Behavior, Elsevier, vol. 96(C), pages 65-89.

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    More about this item

    Keywords

    communication; delegation; experts; information transmission; cheap-talk;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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