Strategic Transmission of Correlated Information

We consider a situation in which a decision-maker gathers information from imperfectly informed experts,\r\nreceiving coarse signals about a uniform state of the world. Private information is (conditionally) correlated\r\nacross players, and communication is cheap talk. We show that with two experts correlation unambiguously\r\ntightens the conditions on preferences for a truth-telling equilibrium. However, with multiple experts the effect\r\nof correlation on the incentives to report information truthfully can be non-monotonic: while little and large\r\nlevels of correlation hinder truth-telling, intermediate levels may discipline experts’ equilibrium behaviour\r\nand foster truthful communication. We discuss the implications of our results for the political discussion in\r\nthe presence of ‘selective exposure’ to media, where similarity in preferences comes with higher correlation,\r\nand a trade-off between truth-telling incentives and informational content arises.