We analyze a cheap-talk model in which an informed sender and an uninformed receiver engage in a finite-period communication before the receiver chooses a project. During the communication phase, the sender sends a message in each period, and the receiver then voluntarily pays money for the...

This research studies how different shapes of misrepresentation cost affect efficiency when the surplus of a transaction is privately known by the agent. We find that the outcome is Pareto efficient if and only if the misrepresentation costs of agents with medium surplus are large enough, and...

In an organization, the principal may care about both efficiency and fairness. In this paper, we study the optimal contracts between a principal and multiple agents when the principal favors a more even expost wage distribution. We characterize the principal’s fairness concern by a convex...

We analyze a cheap-talk model in which an informed sender and an uninformed receiver engage in a finite-period communication before the receiver chooses a project. During the communication phase, the sender sends a message in each period, and the receiver then voluntarily pays money for the...

We analyze a cheap talk model in which an informed sender and an uninformed receiver engage in finite-period communication before the receiver chooses a project. During the communication phase, in each period, the sender sends a cheap talk message and the receiver voluntarily pays money for the...

We consider a multidivision organization’s choice between a decentralized structure and a centralized one. Each division has its own privateinformation and can fully commit to a communication rule. We consider two types of coordination–standardization and diversification. We show that the...