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Public Communication and Information Acquisition

Ryan Chahrour

No 803, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: This paper models the tradeoff, perceived by central banks and other public actors, between providing the public with useful information and the risk of overwhelming it with excessive communication. An information authority chooses how many signals to provide regarding an aggregate state and agents respond by choosing how many signals to observe. When agents desire coordination, the number of signals they acquire may decrease in the number released. The optimal quantity of communication is positive, but does not maximize agents' acquisition of information. In contrast to a model without information choice, the authority always prefers to provide more precise signals.

Keywords: Transparency; Central Bank Communication; Monetary Policy; Global Games; Information Acquisition (search for similar items in EconPapers)
JEL-codes: D83 E50 E58 E60 (search for similar items in EconPapers)
Date: 2012-07-24
New Economics Papers: this item is included in nep-cta and nep-mac
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Published, American Economic Journal: Macroeconomics, 6:3, 73-101, 2014

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