Costly Miscalibration in Communication
Yingni Guo*, Eran Shmaya
Date: 2018-05-11 9:00 am – 9:30 am
Last modified: 2018-04-27
Abstract
An informed sender influences a receiver's decision by strategically disclosing information. The sender pays miscalibration cost whenever the asserted probability distribution of his message differs from the true probability distribution given the message. We show that, when the sender's miscalibration cost is sufficiently high, the sender can achieve his optimal commitment solution in an equilibrium. Under some assumption on the miscalibration cost function, the only rationalizable Sender's strategy is his strategy in the commitment solution.