We investigate strategic information transmission with communication error, or noise. Our main finding is that adding noise can improve welfare. With quadratic preferences and a uniform type distribution, welfare can be raised for almost every bias level by introducing a sufficiently small amount of noise. Furthermore, there exists a level of noise that… (More)
This paper investigates communication between an informed expert and an uninformed principal via a strategic mediator. We demonstrate that, for any bias in the parties'preferences, there exists a strategic mediator that provides the highest expected payo¤ to the principal, as if the players had communicated through an optimal non-strategic mediator.
This paper focuses on issues of allocating authority between an uninformed principal and an informed expert. We analyze the benefits of informational control—restricting the precision of the expert's information (without learning its content). In this case, the result of Dessein (2002)  that delegating decisions to a perfectly informed expert is better… (More)
Competing mechanism games involve contracting environments with multiple principals. This paper extends the static model with three or more agents to the dynamic setting , where agents' types evolve over time according to Markov processes. Agents observe contracts offered and actions taken, but principals observe only private messages from agents. Perhaps… (More)
I study a model of strategic communication between an informed Sender and an uninformed Receiver. The Sender bears a cost of lying, or more broadly, of misrepresenting his private information. The main results show that inflated language naturally arises in this environment, where the Sender (almost) always claims to be a higher type than he would under… (More)