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When to Drop a Bombshell

Gabriele Gratton (), Richard Holden () and Anton Kolotilin ()

No 2016-13, Discussion Papers from School of Economics, The University of New South Wales

Abstract: At an exogenous deadline, Receiver takes an action, the payoff from which depends on Sender’s private type. Sender privately observes if and when a bombshell arrives. Upon arrival, she chooses when to drop it, which starts a public flow of information about her type. Dropping the bombshell earlier exposes it to greater scrutiny, but signals credibility. We characterize the set of equilibria and show that Sender delays dropping the bombshell, and completely withholds it with positive probability. Our model provides an explanation for an “October Surprise” effect and generates further predictions about the dynamics of information disclosure during election campaigns. We find empirical support for these predictions in data on US presidential scandals.

Keywords: information disclosure; strategic timing; Bayesian learning; credibility vs. scrutiny (search for similar items in EconPapers)
JEL-codes: D72 D82 D83 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-10
New Economics Papers: this item is included in nep-mic
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