Informational cascades elicit private information

Abstract : We introduce cheap talk in a dynamic investment model with information externalities. We first show how social learning adversely affects the credibility of cheap talk messages. Next, we show how an informational cascade makes truth-telling incentive compatible. A separating equilibrium only exists for high-surplus projects. Both an investment subsidy and an investment tax can increase welfare. The more precise the sender's information, the higher her incentives to truthfully reveal her private information.
Type de document :
Article dans une revue
International Economic Review, Wiley, 2006, 47 (1), pp.297-325. 〈10.1111/j.1468-2354.2006.00380.x〉
Liste complète des métadonnées
Contributeur : Caroline Bauer <>
Soumis le : mardi 20 novembre 2012 - 08:46:58
Dernière modification le : vendredi 1 décembre 2017 - 01:19:38




Olivier Gossner, Nicolas Melissas. Informational cascades elicit private information. International Economic Review, Wiley, 2006, 47 (1), pp.297-325. 〈10.1111/j.1468-2354.2006.00380.x〉. 〈halshs-00754174〉



Consultations de la notice