Strategic Disclosure of Meaningful Information within the Environment with Competing Agents
Department of Economics, Wayne State University
Last modified: November 22, 2010
Presentation date: 03/12/2011 2:45 PM in NH 1150, Session D
This article studies the effects of asymmetric payoffs on the informed agent's strategic disclosure of meaningful information to his rival. We show that if the penalty is larger than the reward, only low quality information is disclosed, in order to induce imitation. On the other hand, when the reward is larger than the penalty, which quality type of information is revealed depends on how sufficiently large the reward is. If the reward is weakly large, only low quality information is revealed. If the reward is sufficiently large, there exist both a separating- and a pooling equilibrium in which high quality information is revealed, in order to induce deviation. The derived economic intuitions can also be applied broadly to other case such as the firms' competition for occupying the global standard in technology adoption through R&D.