Communication, Perception, and Strategic Obfuscation

Brown University, Providence RI

Investigators

Abstract

Project abstract Communication is a key component of many aspects of economic activities, and more generally of social interactions. Lawyers need to convey information about the parties they represent; central banks provide information about the state of the economy; researchers disseminate results from their work; job candidates report their qualifications to potential employers; firms report their progress to investors. Complex information requires effort both to communicate and understand. Without resorting to dishonesty, an informed entity may be able to mitigate the effect of detrimental information by making it more difficult to decipher, for instance through information over-load or unclear language. While the development of information economics over the past fifty years has greatly improved our understanding of how information affects strategic behavior, many models still overlook the complexities of communicating, acquiring and processing information. The purpose of this study is to understand the extent of communication between individuals when information may be difficult to transmit and/or process. This project will clarify how attention and incentives shape behavior in such widely relevant settings, and why policies preventing lying or omission may be insufficient to address issues of transparency. The project looks at the important interplay between communication, perception and strategic obfuscation from both theoretical and experimental angles. First, the PIs will examine the testable implications of a model of costly communication and perception; that is, they will characterize the set of observed behaviors which are consistent with their model for some underlying cost functions. Second, they will show how one can build on recent developments in experimental tests of rational inattention to test strategic obfuscation; that is, they move from an individual decision problem to the complexities of an interactive setting. Finally, they will test their theory experimentally using a novel experimental design that highlights the impact of limited perception on strategic obfuscation in communication games.