Truth-telling Outcomes in a Reputational Cheap-talk Game with Binary Types

Dohui Woo ()

No 1089, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: Experts with different abilities of information acquisition who receive multiple pieces of signals over time can choose the timing of recommendation and whether to be truthful in a later period, when a recommendation is made in an earlier period. Giving inconsistent recommendations may be seen as a sign of a poor information acquisition ability, but it can also work as a "safety net" that prevents the worst reputation. This study uses a simple binary-ability framework to capture this aspect and proposes equilibriums where all information is delivered truthfully on the path. I examine when such an equilibrium exists, and compare such equilibriums with those where only partial information is delivered; it is found that the former brings higher expected payoffs to the expert than the latter under a certain range of parameters when the utility function is strictly convex in the reputation.

Keywords: truth-telling; reputation concerns; cheap talks (search for similar items in EconPapers)
JEL-codes: D72 L14 (search for similar items in EconPapers)
Pages: 13pages
Date: 2022-12
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:1089

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