Communicating Bias

Swagata Bhattacharjee (), Srijita Ghosh () and Suraj Shekhar
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Swagata Bhattacharjee: Ashoka University
Srijita Ghosh: Ashoka University

No 109, Working Papers from Ashoka University, Department of Economics

Abstract: We consider a static cheap talk model in an environment with either one or two experts whose biases are privately known by the experts themselves. Before the experts learn the state, they send a cheap talk message about their bias to the decision maker. Subsequently, the decision maker chooses one expert to get state relevant advice from. We ask two questions - One, is there an equilibrium where the experts’ bias is fully revealed? Two, is the bias revealing equilibrium welfare improving for the decision maker? We find that when there is only one expert, there is no bias revealing equilibrium. However, if there are two experts, there exists a bias revealing equilibrium, and under some conditions it gives the decision maker more utility than any equilibrium which is possible without bias revelation. This highlights a new channel through which sender competition can benefit the decision maker, through which sender competition can benefit the decision maker.

Keywords: bias; revelation; Cheap; talk; multiple; senders; uncertain; bias (search for similar items in EconPapers)
Pages: 27
Date: 2024-01-29
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:ash:wpaper:109

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