Informational Cascades Elicit Private Information
Copyright policy )Informational Cascades Elicit Private Information
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.
- École des Ponts ParisTech France
- French National Centre for Scientific Research France
- University of Leicester United Kingdom
ökonomisches Modell, subsidy, Economics, Cheap Talk, Information Externality, Informational Cascades, Social Learning, Herd Behaviour, Cheap Talk; Information Externality; Informational Cascades; Social Learning; Herd Behaviour, Information Externality, decision, Entscheidung, credibility, Handeln, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Subvention, social actor, Informationsaustausch, information exchange, ddc:330, Glaubwürdigkeit, communication, Investition, Herd Behaviour, Wirtschaft, Besteuerung, investment, Kommunikation, Gravity Cheap Talk, Information Externality, Informational Cascades, Social Learning, Herd Behaviour, Political Economy, Informational Cascades, Social Learning, Handlung, D83, D62, Volkswirtschaftslehre, model construction, action, Cheap Talk, Modellentwicklung, taxation, Akteur, economic model, jel: jel:D62, jel: jel:D83, ddc: ddc:330
ökonomisches Modell, subsidy, Economics, Cheap Talk, Information Externality, Informational Cascades, Social Learning, Herd Behaviour, Cheap Talk; Information Externality; Informational Cascades; Social Learning; Herd Behaviour, Information Externality, decision, Entscheidung, credibility, Handeln, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Subvention, social actor, Informationsaustausch, information exchange, ddc:330, Glaubwürdigkeit, communication, Investition, Herd Behaviour, Wirtschaft, Besteuerung, investment, Kommunikation, Gravity Cheap Talk, Information Externality, Informational Cascades, Social Learning, Herd Behaviour, Political Economy, Informational Cascades, Social Learning, Handlung, D83, D62, Volkswirtschaftslehre, model construction, action, Cheap Talk, Modellentwicklung, taxation, Akteur, economic model, jel: jel:D62, jel: jel:D83, ddc: ddc:330
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