Senior Academic Seminar: Stephen Morris (MIT)

Sources of authority (with George J Mailath and Andrew Postlewaite)

Abstract:  A leader has authority over a follower's action if the follower complies with the leader's instructions about the action. In other words, a leader has authority if her cheap talk statements are followed in equilibrium. We study the trade-off in acquiring and maintaining a reputation for authority between making good recommendations and making recommendations that are followed.