The strategist and the tactician

• Published in: Journal of economic behavior & organization 2018-11, Vol.155, p.427-434
• Main Author: Rachmilevitch, Shiran
• Format: Article
• Language: English
• Subjects: Sender–receiver; Strategist-tactician
• ISSN: 0167-2681; 1879-1751
• DOI: 10.1016/j.jebo.2018.09.013

•An agent recommends one of n alternatives to a decision maker, who needs to choose one.•Their preferences are positively correlated, but not identical.•Each alternative has a two-dimensional characteristic; each player observes only one dimension.•If n=2, the agent recommends the best alternative in any non-trivial equilibrium.•For n ≥ 3 alternatives, such truthful reporting may be impossible in equilibrium. An agent recommends one of n alternatives to a decision maker (DM), who needs to choose one alternative. Each alternative has a benefit and a cost. The agent knows the benefits, but not the costs; the DM knows the costs, but not the benefits. The DM’s payoff equals the benefit minus the cost, the agent’s payoff equals the benefit. The interpretation is that the agent is a “tactician” whereas the DM is a “strategist,” in the sense that they have a common component in their preferences (the benefit) but the strategist further has “big picture considerations” (the costs), which are absent from the tactician’s world view. If there are two alternatives, the agent recommends a maximum-benefit alternative in any non-trivial equilibrium. With more than two alternatives such equilibrium exists if the model is symmetric, but not if asymmetry exceeds a certain level.