| Popis: |
This paper focuses on the problem of information transmission between the World Bank and the International Monetary Fund, with communication modeled as cheap talk. I posit that the Fund and the Bank have strategically relevant and diverse expertise whose proper combination might provide a richer consideration and resolution of strategic issues. Although transparent sharing of all available information is in the best interest of Fund's and Bank's shareholders, competitive pressures might hinder such process, introducing biases in the two institutions' preferences and distortions in communication. According to intuition, concerns for conformity of actions might mitigate the negative effects of competition. However, truthful communication will never be achieved and strategic uncertainty will persist as an important source of loss, even when both the institutions agree on the relevance of coordinating their actions. |
