Strategic Information Acquisition and Transmission

Rossella Argenziano, Sergei Severinov and Francesco Squintani ()

American Economic Journal: Microeconomics, 2016, vol. 8, issue 3, 119-55

Abstract: This paper explores the implications of costly information acquisition in a strategic communication setting. We show that equilibrium decisions based on a biased expert's advice may be more precise than when information is directly acquired by the decision maker, even if the expert is not more efficient than the decision maker at acquiring information. This result bears important implications for organization design. Communication by an expert to a decision maker may often outperform delegation of the decision-making authority to the expert, as well as centralization by the decision maker of both information acquisition and decision-making authority.

JEL-codes: C72 D23 D82 D83 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mic.20140135
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Citations: View citations in EconPapers (46)

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