Analyzing central bank communication during financial crises, we draw on a surprisingly informative parallel between management of natural disasters such as earthquakes on one hand, and the corresponding communication infrastructure and social interaction during financial turmoil, on the other. The role of social and emotional behavior thereof points to the importance of interpersonal comm...

We consider an information design problem in which a sender tries to persuade receiver that has “correlation neglect,” i.e., fails understand signals might be correlated. show with unlimited number of can fully manipulate the receiver. Specifically, induce hold any state-dependent posterior she wishes to. If only state-independent posterior, use correlated signals, but generally needs more invo...

We study social learning in a continuous action space experiment. Subjects, acting sequence, state their beliefs about the value of good after observing predecessors’ statements and private signal. compare behavior laboratory with Perfect Bayesian Equilibrium prediction predictions bounded rationality models decision-making: redundancy information neglect model overconfidence model. The results...

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. JEL classi…cation: C72, D82, D83

Partially specified probabilities induce coherent risk measures of a special kind. These measures are axiomatized using the four axioms that characterize coherent risk measures and an additional one, which requires that the risk measure be additive on the set of efficient portfolios. Journal of Economic Literature classification numbers: C61, C72, D81, D82, D83

This paper studies the role of communication and reputation in market interactions using data from online procurement auctions. Not only positive reputation ratings but also engaging in communication increases a bidder’s probability of winning the auction. Messages are primarily used to reduce the asymmetric information associated with transactions. JEL Classifi cation: D44, D83, L14

This paper considers learning in an imperfectly competitive setting. By allowing an opponent a “head start," unsuccessful unilateral experimentation may jeopardize future sales and profits. We show that even in the absence of spillover and signalling effects, competition can inhibit the scope of learning, relative to a monopoly. JEL Classification Numbers: D83

This paper presents a framework for applying prediction markets to corporate decision making. The analysis is motivated by the recent surge of interest in markets as information aggregation devices and their potential use within firms. We characterize the amount of outcome manipulation that results in equilibrium and the impact of this manipulation on market prices. (JEL: D71, D82, D83, D84)