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To Disclose or Not to Disclose: Cheap Talk with Uncertain Biases

Ming Li

No 4003, Working Papers from Concordia University, Department of Economics

Abstract: I study strategic information transmission when biases are uncertain. A perfectly informed expert advises a decision maker. The expert has biases with direction unknown to the decision maker. I show that all equilibria are of partitional form as identified by Crawford and Sobel (1982). It never benefits the decision maker or the expert to have the bias of the expert disclosed. The decision maker is better off when the bias distribution is more balanced or when the bias size is smaller.

Keywords: Cheap Talk; Transparency; Advice. (search for similar items in EconPapers)
JEL-codes: C72 D82 P16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-ino
Date: 2003-08, Revised 2004-08
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