Communicating Preferences to Improve Recommendations

Amir Habibi
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Amir Habibi: HU Berlin

No 394, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: I study a cheap talk model between a buyer and a seller with two goods for sale. There is two-sided (independent) private information with sequential, two-way communication. In the first stage, the buyer communicates her private preferences to the seller. In the second stage, the seller communicates the quality of the goods to the buyer. When the buyer’s preference is about which attribute common to both goods she prefers, the seller strictly benefits from the buyer communicating her preferences. Whereas when the buyer’s preference is about which good she prefers, this is never the case.

Keywords: cheap talk; strategic communication; product recommendations (search for similar items in EconPapers)
JEL-codes: D82 L15 (search for similar items in EconPapers)
Date: 2023-05-10
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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