Multi-Sender Disclosure with Costs

TL;DR

This paper analyzes how multiple biased senders decide to disclose or conceal private information considering costs, revealing that the nature of costs influences whether additional senders promote or hinder disclosure, with implications for decision-making.

Contribution

It introduces a model of multi-sender disclosure with costs, showing how costs affect strategic interactions and the overall disclosure dynamics.

Findings

Disclosures are strategic substitutes under disclosure costs.

Disclosures are strategic complements under concealment costs.

Additional senders can harm or help the decision maker depending on message costs.

Abstract

We study voluntary disclosure with multiple biased senders who may bear costs for disclosing or concealing their private information. Under relevant assumptions, disclosures are strategic substitutes under a disclosure cost but complements under a concealment cost. Additional senders thus impede any sender's disclosure under a disclosure cost but promote it under a concealment cost. In the former case, a decision maker can be harmed by additional senders, even when senders have opposing interests. The effects under both kinds of message costs turn on how a sender, when concealing his information, expects others' messages to systematically sway the decision maker's belief.