Non-Fully Strategic Information Transmission

Marco Ottaviani and Francesco Squintani ()

No WP29, Wallis Working Papers from University of Rochester - Wallis Institute of Political Economy

Abstract: Building on Crawford and Sobel's (1982) general communication model, this paper introduces the possibility that players are non-strategic. The sender might be honest, truthfully reporting private information, or the receiver might be naive, blindly implementing the sender's recommendations . In contrast to the predictions of the fully-strategic model, we show that equilibrium communication is inflated but detailed, and that the equilibrium outcome is biased in an ex-ante sense. Our findings are relevant to understanding communication by financial analysts and academic evaluators.

Keywords: communication; bounded rationality; financial advice; grade inflation (search for similar items in EconPapers)
JEL-codes: C70 D82 G14 (search for similar items in EconPapers)
Pages: pages
Date: 2002-10
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Citations: View citations in EconPapers (13)

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