Well Informed Intermediaries in Strategic Communication

Economic Inquiry, Forthcoming

57 Pages Posted: 25 Aug 2009 Last revised: 31 Aug 2009

See all articles by Wei Li

Wei Li

Vancouver School of Economics, University of British Columbia

Date Written: August 24, 2009

Abstract

A privately informed sender may influence the decision maker through an intermediary who is better informed than him. I assume that the objective sender and intermediary pass on their best information, while the biased ones prefer a particular action but also have reputational concerns. I show that the biased intermediary selectively incorporates the sender's information to push his agenda, and his truth-telling incentives always decrease in those of the biased sender. Hence measures making it more costly for the sender to lie worsen the biased intermediary's distortion, and may make the decision maker strictly worse off.

Keywords: strategic communication through intermediaries, indirect marketing, reputational concerns

JEL Classification: C70, D82, M31

Suggested Citation

Li, Wei, Well Informed Intermediaries in Strategic Communication (August 24, 2009). Economic Inquiry, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1460633

Wei Li (Contact Author)

Vancouver School of Economics, University of British Columbia ( email )

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Vancouver, BC V6T 1L4
Canada
604-822-2839 (Phone)

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