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Strategic Transmission of Correlated Information

journal contribution
posted on 04.11.2020, 11:14 by Sergio Currarini, Giovanni Ursino, AKS Chand
We consider a situation in which a decision-maker gathers information from imperfectly informed experts, receiving coarse signals about a uniform state of the world. Private information is (conditionally) correlated across players, and communication is cheap talk. We show that with two experts correlation unambiguously tightens the conditions on preferences for a truth-telling equilibrium. However, with multiple experts the effect of correlation on the incentives to report information truthfully can be non-monotonic: while little and large levels of correlation hinder truth-telling, intermediate levels may discipline experts’ equilibrium behaviour and foster truthful communication. We discuss the implications of our results for the political discussion in the presence of ‘selective exposure' to media, where similarity in preferences comes with higher correlation, and a trade-off between truth-telling incentives and informational content arises.

History

Citation

The Economic Journal, Volume 130, Issue 631, October 2020, Pages 2175–2206, https://doi.org/10.1093/ej/ueaa039

Author affiliation

School of Business

Version

AM (Accepted Manuscript)

Published in

The Economic Journal

Volume

130

Issue

631

Pagination

2175-2206

Publisher

Oxford University Press (OUP)

issn

0013-0133

eissn

1468-0297

Copyright date

2020

Available date

13/05/2022

Language

en

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Categories

Exports