The Hidden Value of Lying : Evasion of Guilt in Expert Advice

I develop a model of strategic communication between an uninformed receiver and a partially informed sender who is averse to lying. The sender's cost of lying is endogenous, depending on the receiver's beliefs induced by the sender's message, rather than on its exogenous formulation. Such preferences lead to the endogenous emergence of evasive communication, i.e., misreporting of the precision of obtained information. In turn, this gives rise to specific predictions regarding welfare implications of several conventional policies. In particular, prohibition of lying (i.e., of explicit falsification) may lead to a decrease in the receiver's welfare under certain conditions. Besides, dealing with ex-ante less informed sender can be beneficial to the receiver