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Timing of predictions in dynamic cheap talk: experts vs. quacks


Smirnov, Aleksei; Starkov, Egor (2019). Timing of predictions in dynamic cheap talk: experts vs. quacks. Working paper series / Department of Economics 334, University of Zurich.

Abstract

The paper studies a dynamic communication game in the presence of adverse selection and career concerns. A forecaster of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a sufficiently general class earlier reports are more credible. Further, any report hurts the forecaster’s reputation in the short run, with later reports incurring larger penalties. The reputation of a silent forecaster, on the other hand, gradually improves over time.

Abstract

The paper studies a dynamic communication game in the presence of adverse selection and career concerns. A forecaster of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a sufficiently general class earlier reports are more credible. Further, any report hurts the forecaster’s reputation in the short run, with later reports incurring larger penalties. The reputation of a silent forecaster, on the other hand, gradually improves over time.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C73, D82, D83, D84
Uncontrolled Keywords:Career concerns, reputation, dynamic games, games of timing, strategic information transmission
Language:English
Date:November 2019
Deposited On:12 Nov 2019 16:18
Last Modified:13 Nov 2019 15:41
Series Name:Working paper series / Department of Economics
Number of Pages:41
ISSN:1664-705X
OA Status:Green
Official URL:https://www.econ.uzh.ch/static/release/workingpapers.php?id=1013

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