An example of conflicts of interest as pandering disincentives

• Main Authors: Chiba, Saori, Leong, Kaiwen
• Other Authors: School of Humanities and Social Sciences
• Format: Article
• Language: English
• Published: 2015
• Subjects: DRNTU::Humanities::General::Careers and profession
• 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
• Institution: Nanyang Technological University

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.