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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

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Online
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1935-1704
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Communication Breakdown: Consultation or Delegation from an Expert with Uncertain Bias

Anthony Rush
  • 1Reserve Bank of Australia,
/ Vladimir Smirnov
  • 2University of Sydney,
/ Andrew Wait
  • 3University of Sydney,
Published Online: 2010-08-04 | DOI: https://doi.org/10.2202/1935-1704.1612

When communicating with an uninformed decision maker, the motives behind an expert's message are often unclear. To explore this and investigate its impact on organizational design, we extend the cheap-talk model of Crawford and Sobel (1982) to allow for uncertainty over the expert's bias. We find that, in contrast to Dessein (2002), it is possible that the decision maker prefers communication to delegation; that is, it can be optimal for a decision maker to retain control and to solicit advice from the expert.

Keywords: delegation; communication; uncertainty; bias; cheap-talk model

About the article

Published Online: 2010-08-04


Citation Information: The B.E. Journal of Theoretical Economics, ISSN (Online) 1935-1704, DOI: https://doi.org/10.2202/1935-1704.1612. Export Citation

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