Economics serving society

Certifiable Pre-Play Communication: Full Disclosure

Jeanne Hagenbach, Frédéric Koessler, Eduardo Perez-Richet

JPEG - 16.9 kb

In what situations can strategically interdependent individuals gain information held by the others? Let us take the case of a political decision maker who consults experts before making a decision that will potentially affect all economic actors. And further, let us suppose that these experts have proof, or verifiable information, that they can give the decision maker. If the interests of all the actors are perfectly aligned, then the divulging of precise information is in the interests of all the parties involved. But what if everyone’s interests do not perfectly coincide?
In this theoretical article, Hagenbach, Koessler and Perez-Richet pose this question and seek to understand what properties of the game between the decision maker and the experts would allow full disclosure of the information. More precisely, they show how a decision maker can provoke perfect revelation of the information by reacting in an unfavourable way when faced with an expert who makes only vague pronouncements. For example, when an expert does not divulge the data on certain aspects of a problem, the decision maker can speculate on these aspects in a way that leads to to a decision that would be disadvantageous for the expert. These conjectures, called “sceptical beliefs” can push experts to be more precise. The authors then propose a general method for representing the incentives of players, which identifies the existence of such sceptical beliefs in all game situations, including games of voting, of competition among firms and of political expertise.
Original title of the article : “Certifiable Pre-Play Communication: Full Disclosure”
Published in: Econometrica en mai 2014, 82(3) pp 1093-1131
Available at :
© happystock -