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RESEARCH PAPER
When Competence Hurts: Revelation of Complex Information
 
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SGH Warsaw School of Economics, Poland
CORRESPONDING AUTHOR
Joanna Franaszek   

SGH Warsaw School of Economics, Poland
Submission date: 2020-12-28
Final revision date: 2021-03-29
Acceptance date: 2021-06-16
Publication date: 2021-09-30
 
GNPJE 2021;307(3):5–23
 
KEYWORDS
JEL CLASSIFICATION CODES
D83
 
ABSTRACT
Even when information is complex and the information processing capacity of economic agents uncertain, noisy messages do not necessarily indicate bad news. I exploit this intuition to examine a simple sender – receiver persuasion game in which effective communication about the state of the world depends not only on the sender’s efforts but also on the complexity of that state and the receiver’s competence. In this environment, the sender-optimal equilibria maximise the amount of noise. The receiver faces a ”competence curse” whereby the smart types might end up with less information and a lower payoff than those who are somewhat less competent.
 
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