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BOK Working Paper No.2017-19, Using Cheap Talk to Polarize or Unify a Group of Decision Makers

Economic Research Institute (+82-2-759-5430) 2017.06.27 7456

Title : Using Cheap Talk to Polarize or Unify a Group of Decision Makers
Authors : Daeyoung Jeong(BOK)

 

<Abstract>

We develop a model of strategic information transmission from an outside expert with informational superiority to a group of people who make a decision by voting on a proposal. An outside expert who observes the qualities of a proposal sends a cheap talk message to decision makers with limited information. A simple cheap talk strategy of the expert can be surprisingly effective in persuading decision makers by polarizing or unifying their opinions. When there is a significant informational gap, decision makers vote in the expert’s interest by focusing only on the expert’s message, even though they know she has her own bias.

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