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Cover of: Communication and Binary Decisions: Is it Better to Communicate?
Estelle Malavolti, Frédéric Loss, Thibaud Vergé

Communication and Binary Decisions: Is it Better to Communicate?

Section: Articles
Volume 169 (2013) / Issue 3, pp. 451-467 (17)
Published 09.07.2018
DOI 10.1628/093245613X13621221166330
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  • 10.1628/093245613X13621221166330
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Summary
We study information transmission between an informed expert and an uninformed decision-maker when the decision is binary and the expert does not have a systematic bias. Whenever an equilibrium exists where the decision is delegated to the expert, it is ex ante Pareto-dominant. Adding a round of multilateral communication does not improve information transmission. The decision-maker can, however, improve information transmission by communicating sequentially with two experts. However, introducing multiple rounds of communication (i.e., allowing for rebuttal) does not help.