An example of conflicts of interest as pandering disincentives
Consider an uninformed decision maker (DM) who communicates with a partially informed agent through cheap talk. DM can choose a project to implement or the outside option of no project. Unlike the current literature, we show that if there exists multiple dimensions of conflicts of interests between...
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| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
2015
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/107311 http://hdl.handle.net/10220/25383 http://dx.doi.org/10.1016/j.econlet.2015.03.028 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | Consider an uninformed decision maker (DM) who communicates with a partially informed agent through cheap talk. DM can choose a project to implement or the outside option of no project. Unlike the current literature, we show that if there exists multiple dimensions of conflicts of interests between a single agent and a single receiver (DM), an increase in the conflict of interest in one dimension may actually improve cheap talk communication given that it acts as a countervailing force to conflicts of interest in other dimensions. |
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