Costly and Truthful Communication: Two Alternative Objectives

Olivier Body

Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper is about costly and truthful communication. I show that in a situation where a sender tries to convince a receiver to accept a project, the receiver's communication objective and effort depend on whether the receiver would reject or accept the project without any communication.If without communication the receiver would reject the project, his communication objective is to identify and accept a high quality project. His effort depends positively on his gain of accepting a high quality project. If without communication the receiver would accept the project, his communication objective is to identify and reject a low quality project. His effort depends positively on his loss from accepting a low quality project.

Pages: 27 p.
Date: 2014-02
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (2)

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