# Forecasts as Repeated Cheap Talk from an Expert of Unknown Statistical Bias

26.10.2023

Irene **Valsecchi** (University of Milano-Bicocca)

D81, D84

Cheap-talk, expert, statistical bias

For two periods an expert *E* announces his forecast of the state to a decision-maker *D* who chooses action. They disagree about the precision of the probability assessments. At the end of period 1 the state is observed. In the last period *E* makes announcements more extreme than his forecasts. Despite countable equilibria, full revelation is never realised. When in period 1 *E* is interested in reputation only, the initial equilibrium partition is finite; *E* makes announcements of greater uncertainty with respect to his forecasts. When *E* is interested in action too, reputational concerns mitigate exaggerated reports.

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Citazione suggerita: I. Valsecchi, ‘Forecasts as Repeated Cheap Talk from an Expert of Unknown Statistical Bias’, Nota di Lavoro **20.2022**, Milano, Italy: Fondazione Eni Enrico Mattei