FSS-DECO seminar: Reputational Cheap Talk Versus Prior Information

Speaker: Prof. Allen Io Kuan VONG, Assistant Professor, Department of Economics, National University of Singapore

Date: 11 Jun 2025 (Wednesday)

Time: 14:00-15:15

Language: English

Venue: E21B-G002

Abstract: I study a setting where a sender communicates her information about a hidden state with a receiver who wants to match his action with that state. The sender strives to appear informed possibly at the receiver’s expense. I characterize the receiver’s tradeoff between relying on the sender or on prior information about the state. I show that the receiver relies only on prior information, irrespective of how informed the sender may be, only when prior information is neither sufficiently noisy nor sufficiently informative. My results highlight a complementarity that informative prior information mitigates adverse reputation effects and facilitates high-quality communication.