Public Communication and Information Acquisition
American Economic Journal: Macroeconomics
vol. 6,
no. 3, July 2014
(pp. 73-101)
Abstract
This paper models the tradeoff, perceived by central banks and other public actors, between providing the public with useful information and the risk of overwhelming it with excessive communication. An information authority chooses how many signals to provide regarding an aggregate state and agents respond by choosing how many signals to observe. When agents desire coordination, the number of signals they acquire may decrease in the number released. The optimal quantity of communication is positive but does not maximize agents' acquisition of information. In contrast to a model without information choice, the authority always prefers to provide more precise signals.Citation
Chahrour, Ryan. 2014. "Public Communication and Information Acquisition." American Economic Journal: Macroeconomics, 6 (3): 73-101. DOI: 10.1257/mac.6.3.73Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- E52 Monetary Policy
- E58 Central Banks and Their Policies
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