 To reveal or not to reveal: Privacy preferences and economic frictionsNed Augenblick and Aaron Bodoh-Creed Games and Economic Behavior, 2018, vol. 110, issue C, 318-329 Abstract: We model two agents who wish to determine if their types match, but who also desire to reveal as little information as possible to non-matching types. For example, firms considering a merger must determine the merger's profitability, but would prefer to keep their information private if the deal fails. In the model, agents with different traits reveal information to a potential partner to determine if they share the same type, but face a penalty depending on the accuracy of their partner's posterior beliefs. With limited signaling, there is a universally-preferred dynamic communication protocol in which traits are sequentially revealed depending on the sensitivity of the trait. Interestingly, the rarity of an agent's traits plays no role due to the balance of opposing effects: although revealing a rare trait reveals more information immediately, it also screens more partners from later learning information about other traits. Keywords: Privacy; Dynamic communication; Asymmetric information (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:110:y:2018:i:c:p:318-329 DOI: 10.1016/j.geb.2017.10.014 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.