1475-679X/asset/JOAR_left.gif?v=1&s=d0573f42c81e33c62eb3cef3f60df4af770b38d0)
Imperfect Information and Credible Communication
Article first published online: 17 DEC 2002
DOI: 10.1111/1475-679X.00006
University of Chicago on behalf of the Institute of Professional Accounting, 2001
1475-679X/asset/cover.gif?v=1&s=5ce2f96163f867c4784b4464730850978959696d "Journal of Accounting Research")
Additional Information
How to Cite
Fischer, P. E. and Stocken, P. C. (2001), Imperfect Information and Credible Communication. Journal of Accounting Research, 39: 119–134. doi: 10.1111/1475-679X.00006
Publication History
- Issue published online: 17 DEC 2002
- Article first published online: 17 DEC 2002
- Abstract
- Cited By
This paper analyzes a communication game between a sender and receiver with misaligned incentives. Because of the misalignment, in equilibrium, the sender's privately observed information is not perfectly communicated. We study the relation between the quality of the sender's information and the quality of the information communicated. We establish that the quality of information communicated is a non-monotonic function of the quality of the sender's information, and it is maximized when the sender has imperfect information. We suggest that our model applies to a setting where an equity research analyst communicates information about a firm's value to investors.