caa a22 4500 605475822 CHVBK 20210128100353.0 cr unu---uuuuu 210128e20150501xx s 000 0 eng 10.1007/s00199-015-0870-2 doi (NATIONALLICENCE)springer-10.1007/s00199-015-0870-2 Rational exaggeration and counter-exaggeration in information aggregation games [Elektronische Daten] [Gordon Rausser, Leo Simon, Jinhua Zhao] We study an information aggregation game in which each of a finite collection of "senders” receives a private signal and submits a report to the center, who then makes a decision based on the average of these reports. The integration of three features distinguishes our framework from the related literature: players' reports are aggregated by a mechanistic averaging rule, their strategy sets are intervals rather than binary choices, and they are ex ante heterogeneous. In this setting, players engage in a "tug-of-war,” as they exaggerate and counter-exaggerate in order to manipulate the center's decision. While incentives to exaggerate have been studied extensively, the phenomenon of counter-exaggeration is less well understood. Our main results are as follows. First, the cycle of counter-exaggeration can be broken only by the imposition of exogenous bounds on the space of admissible sender reports. Second, in the unique pure-strategy equilibrium, all but at most one player is constrained with positive probability by one of the report bounds. Our third and fourth results hold for a class of "anchored” games. We show that if the report space is strictly contained in the signal space, then welfare is increasing in the size of the report space, but if the containment relation is reversed, welfare is independent of the size of the space. Finally, the equilibrium performance of our heterogeneous players can be unambiguously ranked: a player's equilibrium payoff is inversely related to the probability that her exaggeration will be thwarted by the report bounds. Springer-Verlag Berlin Heidelberg, 2015 Information aggregation nationallicence Majority rule nationallicence LIBOR nationallicence Baltic Dry Index nationallicence Yelp nationallicence Online reviews nationallicence Exaggeration nationallicence Counter-exaggeration nationallicence Mean versus median mechanism nationallicence Strategic communication nationallicence Incomplete-information games nationallicence Strategic information transmission nationallicence Rausser Gordon Department of Agricultural and Resource Economics, University of California at Berkeley, 207 Giannini Hall, 94720-3310, Berkeley, CA, USA aut Simon Leo Department of Agricultural and Resource Economics, University of California at Berkeley, 207 Giannini Hall, 94720-3310, Berkeley, CA, USA aut Zhao Jinhua Department of Economics, Department of Agricultural, Food and Resource Economics, Michigan State University, 205A Old Botany, 48824, East Lansing, MI, USA aut Economic Theory Springer Berlin Heidelberg 59/1(2015-05-01), 109-146 0938-2259 59:1<109 2015 59 199 https://doi.org/10.1007/s00199-015-0870-2 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s00199-015-0870-2 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Rausser Gordon Department of Agricultural and Resource Economics, University of California at Berkeley, 207 Giannini Hall, 94720-3310, Berkeley, CA, USA aut NATIONALLICENCE 700 1- Simon Leo Department of Agricultural and Resource Economics, University of California at Berkeley, 207 Giannini Hall, 94720-3310, Berkeley, CA, USA aut NATIONALLICENCE 700 1- Zhao Jinhua Department of Economics, Department of Agricultural, Food and Resource Economics, Michigan State University, 205A Old Botany, 48824, East Lansing, MI, USA aut NATIONALLICENCE 773 0- Economic Theory Springer Berlin Heidelberg 59/1(2015-05-01), 109-146 0938-2259 59:1<109 2015 59 199