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Communication via Third Parties

Author

Listed:
  • Jacopo Bizzotto

    (OsloMet - Oslo Metropolitan University)

  • Eduardo Perez-Richet

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research)

  • Adrien Vigier

    (UON - University of Nottingham, UK)

Abstract

A principal designs an information structure and chooses transfers to an agent that are contingent on the action of a receiver. The principal faces a trade-off between, on the one hand, designing an information structure maximizing non-monetary payoffs, and on the other hand, minimizing the information rent that must be conceded to the agent in order to implement the information structure which the principal designed. We examine how this trade-off shapes communication. Our model can be applied to study the relationship between, e.g.: political organizations and the public relations companies that campaign on their behalf, firms and the companies marketing their products, consultancies and the analysts they employ.

Suggested Citation

  • Jacopo Bizzotto & Eduardo Perez-Richet & Adrien Vigier, 2022. "Communication via Third Parties," SciencePo Working papers Main hal-03874010, HAL.
    • Handle: RePEc:hal:spmain:hal-03874010
    DOI: 10.2139/ssrn.3530804
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03874010
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    References listed on IDEAS

    as
    1. Gabriele Gratton & Barton E Lee, 2024. "Liberty, Security, and Accountability: The Rise and Fall of Illiberal Democracies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(1), pages 340-371.
    2. Andriy Zapechelnyuk, 2020. "Optimal Quality Certification," American Economic Review: Insights, American Economic Association, vol. 2(2), pages 161-176, June.
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    6. Rosar, Frank, 2017. "Test design under voluntary participation," Games and Economic Behavior, Elsevier, vol. 104(C), pages 632-655.
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    8. Claudia Herresthal, 2020. "Hidden Testing and Selective Disclosure of Evidence," CRC TR 224 Discussion Paper Series crctr224_2020_145, University of Bonn and University of Mannheim, Germany.
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    Cited by:

    1. Gerardi, Dino & Grillo, Edoardo & Monzón, Ignacio, 2022. "The perils of friendly oversight," Journal of Economic Theory, Elsevier, vol. 204(C).
    2. Jacopo Bizzotto & Adrien Vigier, 2022. "A Case for Tiered School Systems," Working Papers 202205, Oslo Metropolitan University, Oslo Business School.

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    More about this item

    Keywords

    Information Design; Moral Hazard; Agency Cost; Information Acquisition;
    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

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