EconPapers    
Economics at your fingertips  
 

Managerial Economics of Cheap Talk

Saori Chiba () and Kaiwen Leong ()
Additional contact information
Kaiwen Leong: Nanyang Technological University

No 24, Working Papers from Department of Management, Università Ca' Foscari Venezia

Abstract: Consider an uninformed decision maker (DM) who communicates with a partially informed speaker (S) through cheap talk. DM can choose a project to implement or the outside option of no project. We show that if the agentsÕ ex-ante rankings over projects do not coincide, then this conflict of interest can reduce SÕs incentive to pander and hence facilitate information transmission. Intuitively, SÕs ex-ante bias and the incentive to pander affect SÕs information revelation in opposite directions and hence offset each other. We also explore the relationship between information transmission and managerial issues such as delegation, disclosure, and interpersonal authority.

Keywords: Cheap Talk; Delegation; Disclosure; Interpersonal Authority; Pandering (search for similar items in EconPapers)
JEL-codes: D82 D83 M10 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2013-11
New Economics Papers: this item is included in nep-cta, nep-mic and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://virgo.unive.it/wpideas/storage/2013wp24.pdf First version, 2013 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vnm:wpdman:60

Access Statistics for this paper

More papers in Working Papers from Department of Management, Università Ca' Foscari Venezia Contact information at EDIRC.
Bibliographic data for series maintained by Marco LiCalzi ().

 
Page updated 2022-06-26
Handle: RePEc:vnm:wpdman:60