Document Type
Discussion Paper
Publication Date
12-1-1999
CFDP Number
1242
CFDP Pages
29
Abstract
An informed advisor wishes to convey her valuable information to an uninformed decision maker with identical preferences. Thus she has a current incentive to truthfully reveal her information. But if the decision maker thinks the advisor might be biased in favor of one decision, and the advisor does not wish to be thought to be biased, the advisor has a reputational incentive to lie. If the advisor is sufficiently concerned about her reputation, no information is conveyed in equilibrium. In a repeated version of this game, the advisor will care.
Recommended Citation
Morris, Stephen, "Political Correctness" (1999). Cowles Foundation Discussion Papers. 1492.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1492