We analyze the sustainability of a conversation when one agent might be endowed with a piece of private information that affects the payoff distribution to its benefit. Such a secret can compromise the sustainability of conversation. Even without an obligation, the secret holder will disclose its secret if it prevents preemptive termination of the conversation. The nonsecret holder lacks this possibility and stops the conversation. Competition and limited effectiveness of the conversation amplify this result of early disclosure and render the conversation process less sustainable. We discuss policy and managerial implications for industry standard development and joint ventures

Conversation with Secrets / Tarantino, Emanuele; Ganglmair, B. - In: RAND JOURNAL OF ECONOMICS. - ISSN 0741-6261. - 45:2(2014), pp. 273-302. [10.1111/1756-2171.12051]

Conversation with Secrets

Tarantino E;
2014

Abstract

We analyze the sustainability of a conversation when one agent might be endowed with a piece of private information that affects the payoff distribution to its benefit. Such a secret can compromise the sustainability of conversation. Even without an obligation, the secret holder will disclose its secret if it prevents preemptive termination of the conversation. The nonsecret holder lacks this possibility and stops the conversation. Competition and limited effectiveness of the conversation amplify this result of early disclosure and render the conversation process less sustainable. We discuss policy and managerial implications for industry standard development and joint ventures
2014
Conversation with Secrets / Tarantino, Emanuele; Ganglmair, B. - In: RAND JOURNAL OF ECONOMICS. - ISSN 0741-6261. - 45:2(2014), pp. 273-302. [10.1111/1756-2171.12051]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/189706
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