Separating the Wheat from the Chaff

Johannes H\"orner and Paula Onuchic

Papers from arXiv.org

Abstract: We study a reputational cheap-talk environment in which a judge chooses between two speakers of unknown expertise, an expert and a quack. Both speakers seek to be selected, while the judge wishes to identify the expert. The best equilibrium for the judge features truth-telling by the expert, yet the judge favors speakers with more extreme messages. This bias toward extremism does not induce exaggeration, but instead sustains truthful communication. We characterize the quack's equilibrium messaging strategy, relating the degree to which it panders to the judge's prior to the state distribution, the speakers' initial reputations, and the judge's private knowledge of the state. We interpret these results in the context of two applications, the post-training of AI chatbots through human feedback and media competition.

Date: 2026-01, Revised 2026-11
New Economics Papers: this item is included in nep-gth and nep-mic
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