Evasion of guilt in expert advice

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Abstract

We develop a model of strategic communication between an uninformed receiver and a partially informed sender who is guilt-averse toward the receiver. The sender’s cost of sending a particular message is endogenous, depending on the receiver’s beliefs induced by this message rather than on its exogenous formulation. Such preferences lead to the endogenous emergence of evasive communication in that the sender types who prefer not to reveal their information to the receiver pool with uninformed types rather than with types observing different information. As a result, the receiver may prefer an equilibrium with a smaller amount of messages used on the equilibrium path. Besides, dealing with an ex ante less informed sender can be beneficial to the receiver, while the sender himself may want to commit to a smaller ex ante likelihood of being informed.
Original languageEnglish
Pages (from-to)296-310
Number of pages15
JournalJournal of Economic Behavior and Organization
Volume167
Early online date21 Jun 2019
DOIs
Publication statusPublished - 1 Nov 2019

Keywords

  • Guilt aversion
  • Information transmission
  • Experts
  • Psychological game theory

ASJC Scopus subject areas

  • Economics and Econometrics

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