Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

A Note on Reputation in Noisy Cheap Talk

Vol.33, No.3, September , 11–32



  •   (Yeungnam University)

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Abstract  

We revisit Morris (2001) two-period advice game but with communication error, and investigate how communication error affects the advisor’s reputational incentives and thus her information transmission. Reputational incentives differ from Morris (2001) and critically depend on the structure of noise and specific equilibrium strategies. We borrow the notion of “plausible deniability” by Blume et al. (2019) and explain the effects of communication error on information transmission and welfare. We show that the weakened reputational incentives reduce the good type advisor’s incentive to lie, compared to Morris (2001).


Keywords
   Advice Game, Cheap Talk, Reputation, Communication Error, Plausible Deniability

JEL classification codes
   C72, D82, D83
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