Advisors with hidden motives

Onuchic, Paula ORCID: 0009-0007-1818-5356 (2025) Advisors with hidden motives. Games and Economic Behavior, 153. 431 - 450. ISSN 0899-8256

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Abstract

An advisor discloses evidence about an object to a potential buyer, who doesn't know the object's value or the profitability of its sale (the advisor's motives). I characterize optimal disclosure rules that balance two goals: maximizing the overall probability of sale, and steering sales from lower- to higher-profitability objects. I consider the implications of a regulation that forces the advisor to always reveal her motives to the buyer. I show that whether such policies induce the advisor to disclose more evidence about the object's value hinges on the curvature of the buyer's demand for the object. This result refines our understanding of effective regulation of advisor-advisee communication with and without commitment.

Item Type:	Article
Additional Information:	© 2025 The Author
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Date Deposited:	08 Aug 2025 09:09
Last Modified:	11 Sep 2025 12:29
URI:	http://eprints.lse.ac.uk/id/eprint/129091

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